On the surface it may appear that the head of the FCA, the UK's financial regulator, Martin Wheatly resigned voluntarily yesterday. The truth is that here only "quit" after being told by George Osborne that he would not renew his contract when it expires in March.

For those who are unfamiliar, Wheatley led the FCA from its inception in April 2013, and oversaw a regulator that extracted record penalties from the industry, teaming with US authorities in the Libor and foreign exchange benchmark-rigging scandals. He also targeted retail banks for mis-selling products to consumers and secured sweeping new powers, including oversight of payday lenders and antitrust tools. Granted, he was not able to send any prominent bankers to prison - the only person behind bars so far is the scapegoat for the HFT's May 2010 flash crash, Nav Sarao - but his surprisingly dogged crackdown on manipulation was the main catalyst for the revelation of Liborgate (formerly known as a "conspiracy theory") which then spread to FX, commodities (including gold) and Treasuries, and which most recently cost the jobs of Deutsche Bank's co-CEO and led to several changes at the top of Barclays bank.

It also cost Wheatley his job.

According to the FT, citing government insiders, the message that his contract would expire was relayed to Mr Wheatley “relatively recently” and that the Financial Conduct Authority chief had decided that in such circumstances he did not want to serve out the remainder of his existing term. He will step down on September 12, with Tracey McDermott, the regulator’s head of supervision, taking over until a replacement is found."

The move comes a month after Mr Osborne, the chancellor, unveiled a “new settlement” with the City of London — suggesting a shift from an era of tough regulation of the financial services sector.

The paradox: while Osborne’s official statement praised Mr Wheatley’s performance but talked about moving the FCA on to “the next stage. The government believes that a different leadership is required” to build on the FCA’s foundations, he said.

In other words, the chancellor got "the tap on the shoulder" and was advised by UK's banks that they would much rather if there is only token regulation and the pretense of supervision instead of someone like Wheatley who keeps making banks pay massive fines every quarter to the point where one-time, non-recurring legal charges are both non-one time and recurring (even if it means nobody actually goes to prison).

Furthermore, the former head of Hong Kong’s Securities and Futures Commission did not always have the confidence of government officials, who have privately urged regulators to take a lighter approach as the economy improves and banker-bashing falls out of favour. Some industry executives, meanwhile, viewed him as remote and unhelpful and complained to senior Conservative politicians about his consumer-champion agenda.

But his biggest transgression: "one senior UK bank director said: "The problem with Martin was that he made so many enemies, partly for good reason because banks did rightly need firm treatment after the crisis. But he seemed to have a mindset that all bankers were evil."

We wonder where he may have gotten that idea:

But most importantly, "he made many enemies", enemies which just happen to be in control of the decision-making process by their puppets in UK government.

Which also means that the period of massive civil (if not criminal) penalty charges in the UK is now over and the time of banker prosecution, fake as it may have been, is officially over. It also means that it is once again open season for banks to manipulate and rig anything and everything that has a "market-set" price.

Then again, there may be more to Wheatley's departure than meets the eye.

As one commentator notes, "Martin Wheatley achieved something unique: both bankers and victims of financial services misconduct hated him, and wanted him gone. The former grew tired of the procession of huge, seemingly random fines imposed on their blameless shareholders and the endless series of behavioural economics-based recommendations imposed by supervision teams. The latter berated him for refusing to hound the bad guys out of the industry and lock them up.

Both are right. Wheatley's era will be judged as one in which there was a lack of discrimination and precision. Much easier to fine a bank than prosecute a rogue banker. Especially if some of the rogues are in very senior positions, and also have the ability to dole out obscenely well-paid sinecures to failed ex-regulators... The need to track down and eliminate the bad apples while laying off the shareholders and let managers manage is the message that George Osborne and Mark Carney delivered, in no uncertain terms, at the Mansion House last month. Just days later, Wheatley made an ill-judged comment to a reporter about tracking down wrongdoers not being 'in our charter' (whatever that is). My guess is that this is what hammered the final nail into his professional coffin.

This does appear accurate: after all if Wheatley really did want to ferret out all corruption he should have started with the Bank of England itself, which as we reported before, was one of the key participants in the FX rigging scandal, and where after a few key personnel were let go, things are back to normal. Because the last thing one is allowed to do nowadays, is to suggest that central banks themselves are participating in the rigging of market products, be they FX or gold (which lately are synonymous according to the US OCC) and hint that the gross market manipulation taking place in China is really quite endemic and is merely an example of what central banks do the world over.

One can only hope that the assessment above is accurate and that Wheatley's replacement will indeed crack down on actual banks instead of bank shareholders, who end up being the ones who pay the fines for banker transgression.

And just to make sure all the t's are crossed, the obligatory diplomatic statements that the departure is amicable and Wheatley remains respected, were a key part of the charade. Sure enough.

Mr Wheatley said: “I am incredibly proud of all we have achieved together in building the FCA over the past four years. I know that the organisation will build on that strong start and work so that the financial services industry continues to thrive.” John Griffith-Jones, chairman of the FCA, said: “Martin has done an outstanding job as chief executive setting up and leading the FCA over the past four years. We owe him a lot and I and my board would like to thank him for his great efforts in setting up the organisation and for the contribution he has made to putting conduct so firmly at the top of the financial services agenda.”

Because no matter what the real reason behind Wheatley's departure, whatever bankers want...

And speaking of which, if only the US SEC had as its "leader" not a person whose entire legal career was spent defending Wall Street and is now forced to recuse herself from virtually every enforcement action, then just maybe the US retail investor would still be willing to participate in the rigged casino, and allow banks and hedge funds to offload their record risk holdings to the "dumb money" which is increasingly looking like the smartest money of all.