The Financial Conduct Authority (FCA) is set to be heavily criticised over its decision to leak details of an upcoming insurance probe to a national newspaper, inadvertently causing shares in several major life companies to plummet, according to reports.
In its final report into the events a year ago, set to be published this week, the Treasury Select Committee (TSC) will accuse the financial services watchdog of a "dereliction of duty", Sky News reports, citing an unnamed source.
The broadcaster said John Griffith-Jones, chairman of the FCA and Martin Wheatley, chief executive of the FCA will be singled out for criticism.
In March 2014, the regulator agreed to brief a national newspaper on details of an upcoming probe into "long-standing" customers in life insurance-type products.
By seeking early coverage of its plans, which were due to be announced several days later, the FCA hoped the scope and objectives of its review would be better understood.
However, the leak of market sensitive information prompted significant falls in the share prices of several life companies, including Aviva, Prudential and Legal & General.
Shortly afterwards, Andrew Tyrie, chairman of the TSC said the regulator may have been guilty of an "extraordinary blunder" by allowing its actions to create a disorderly market in shares.
An independent report by law firm Clifford Chance, ordered by the FCA and published in December last year, concluded the regulator's strategy of leaking news was "high risk" and inadequate.
Simon Davis, partner at Clifford Chance described the FCA's actions as well-intentioned but ultimately "high risk, poorly supervised and inadequately controlled".
Davis's report also revealed staff working in the FCA's supervision division warned the regulator not to brief the newspaper. To do so, they said, would pile more "misery" on life insurers already reeling from announcements made at Budget 2014 related to pensions ‘freedom'.
Sky News said the TSC report would echo many of Davis's criticisms.