After a London jury acquitted six defendants in late January, I hope the Serious Fraud Office’s decision to prosecute individuals for their alleged part in the LIBOR rate fixing scandal doesn't blow up in its face.
At the trial, the SFO alleged the six men had conspired with Tom Hayes to manipulate LIBOR. Hayes, a former UBS and Citigroup trader, was convicted by a jury in London last August.
After the acquittals, defendant Colin Goodman's solicitor said: “We can only reiterate what his counsel told the jury, that the SFO case was a complete shambles and should never have been brought.”
The LIBOR scandal required investigation. The flak from the United States and its Justice Department was a a significant driving force behind the UK's parallel investigation.
The SFO enjoys a mixed reputation among UK law enforcement agencies. Criticism of the agency is debatable; their investigations almost always come soaked in political intrigue.
Police fraud squads in particular, sometimes with tongue-in-cheek, suggest that the SFO will only accept a case referral if there is more than a hint of politics to it -- as a means of securing the limelight and publicity.
The LIBOR rate fixing case illustrates this. The SFO secured the conviction of Tom Hayes after a jury trial and his incredibly heavy sentence of 14 years, reduced to nine on appeal. The outcome was reported by every newspaper and news channel.
But when things go wrong -- such as the six LIBOR acquittals -- the SFO suffers the criticisms.
Working for the SFO can't be easy when your fraud investigations are mixed with a hint of political scandal.
We haven’t heard the last of the LIBOR scandal. The Americans are determined to make their own political point that nobody messes with their financial system, especially Brit fraudsters hell-bent on making a few extra bob.
Once the dust settles and justice runs its course, we can be sure political fallout will follow.
From London, the SFO will be at the hub of this debate. And its reputation will continue to receive a mixed perception among law enforcement peers, regardless of the ultimate conclusion.
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Written by Martin S. Kenney