Barclays Trial Defeat Means More Woes for Embattled Prosecutor
(Bloomberg) -- The U.K.’s Serious Fraud Office faces more uncertainty after losing a monumental eight-year investigation and prosecution of three former Barclays Plc bankers.
The jury took just a few hours to return a unanimous verdict, acquitting Roger Jenkins, Tom Kalaris and Richard Boath of conspiracy to commit fraud at the height of the 2008 financial crisis. The verdict is a staggering setback for an agency designed to prosecute errant executives and public companies.
The prosecutor has been under fire for years as the government has sought to fold it into other law-enforcement agencies. The trial, which cost the SFO as much as 10 million pounds ($12.8 million), follows a similar high-profile setback in a case involving a trio of Tesco Plc executives caught up in an accounting scandal.
“This is another high-profile defeat for the Serious Fraud Office,” said Aziz Rahman, a white-collar defense lawyer in London. “It is a crushing loss that should be seen by the SFO as a painful lesson that it needs to heed.”
The bankers, all in their 60s, were cleared of charges Friday that they fraudulently hid 322 million pounds ($415 million) paid to Qatar to secure a 4-billion pound investment in the bank.
The prosecutor has fared better outside of court, landing some significant deals with companies in bribery cases. Just last month, Airbus SE agreed to pay $4 billion in a settlement to the U.K., the U.S. and France, although the case wasn’t brought against individuals.
“While it would be wrong for the SFO to only prosecute matters where it is certain of success; time after time allegations against individuals have been dismissed by the court or been rejected by a jury,” said Ross Dixon, another criminal defense lawyer.
The Barclays case, however, has been an uphill fight for years. Charges against the bank itself were thrown out in 2018.
And this is the second time that the three executives faced a jury on the charges. A judge had thrown out the case in the middle of the trial last year, only for an appeals court to reinstate most of the charges. The court upheld the decision to toss out charges against former Barclays Chief Executive Officer John Varley.
“The SFO did all it could to shoehorn these charges into court,” Rahman said. “It has been left with egg on its face.”
The prosecutor said Friday that it remains “determined to bring perpetrators of serious financial crime to justice.”
If outside lawyers were critical of the SFO, the attorneys for the three executives were scathing. Boath’s attorney said the SFO ignored a decision by regulators at the Financial Conduct Authority to clear his client.
“What was the SFO doing spending millions prosecuting Mr, Boath, when he had been cleared of exactly the same conduct by the FCA?” Michael O’Kane said in an email. “The new Attorney General should conduct a thorough review as to why the SFO repeatedly demonstrates such poor judgment.”
But Jenkins, who faced SFO prosecutors at two separate trials, took a gentler line, implying that the agency needs more funding.
“I am conscious that the SFO plays an important role in the ethical functioning of our capital markets,” Jenkins said in a statement. “However, it is equally important that they are properly resourced to act fairly and expeditiously.”
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