It is easy to attack City regulators and their hard-pressed in-house lawyers. When big "irregularities" which could involve fraud emerge in companies, they face a stark choice – throw the book at those involved and spend hundreds of thousands of pounds trying to secure punishment, or publicly slap them on the wrists and leave well alone.
The first option can result in accusations of wasting taxpayer's money for the sake of a vendetta. But anything but pursuing full punishment carries the risk of being labelled soft.
Recently, the regulators have become more hawkish. Two cases in particular have left them open to attack. The Department of Trade and Industry (DTI) has spectacularly failed in its four-year bid to get John Gunn, chairman of collapsed British & Commonwealth, disqualified and will now have to pay Gunn's massive legal fees.
Then, last month, there were the huge costs run up by the regulator Imro as it pursued the Morgan Grenfell directors supervising rogue fund manager Peter Young.
In both cases the regulators expensively pursued individuals whom no one had accused of dishonesty or fraud.
On the issue of directors' disqualifications, the suspicion is that, in 1994, the Conservative government ordered a crackdown on the "fat cat" directors hitting the headlines.
That year, the number of disqualification proceedings issued more than tripled to about 1,500. It was the same year in which DTI inspectors published their report into John Gunn and British & Commonwealth.
Despite the fact the report cleared Gunn and his finance director of dishonesty, and implied that they had merely been suckered into buying a decidedly dodgy company (Atlantic Computers), the DTI stuck them on the list of people that it wanted deemed unfit to run a public company.
This was plainly an error. It was at Atlantic the inspectors found creative accounting and it was Atlantic directors who should have been the major targets.
If directors are found to be lazy or incompetent, rather than fraudulent or dishonest, then let the regulators say so publicly in their reports and let the market decide whether they want to hire them.
It is right for City regulators to be hawkish, but they should make sure that they use their expensive talons on the right prey before swooping.
The other, perhaps more important, lesson is one for the politicians. Much of the criticism of the regulators in the two cases stemmed from the length of time they took. One reason for this may be that the Treasury Solicitors and other regulators have too few staff paid too little working on too many cases. If politicians decide on a crackdown, they should first make sure they have given the enforcers the resources for it.
