The Libor trial could be a turning point for SFO

 
Julian Harris
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Hayes is raising money to take his case to the Criminal Cases Review Commission (Source: Getty)

The UK's fraud squad has had a rough ride in recent years.

Wave after wave of criticism has battered its modest West End headquarters, especially since the botched investigation into property tycoon Vincent Tchenguiz. Just over four years have passed since the Serious Fraud Office (SFO) admitted that there were “no longer reasonable grounds” for pursuing Tchenguiz.

One month after this embarrassing climbdown, in the summer of 2012, attention turned to an entirely unrelated and growing scandal – the widespread rigging of benchmarks by some of the world’s biggest banks.

Until last week, the SFO’s response to rate-rigging was threatening to add another line to its list of disappointments. Only one person – Tom Hayes – had been found guilty by a court, from the 13 individuals initially targeted. Six others were acquitted in January, while a probe into forex benchmark manipulation was dropped in March. Vultures were circling.

Read more: Three ex-Barclays bankers found guilty of Libor-rigging

The latest Libor trial may be a turning point, however. Five of the aforementioned 13 accused ex-bankers have now pleaded guilty or been found guilty – a high enough ratio to suggest that the operation was worthwhile.

It may be crude to judge the SFO purely on its hit-rate, and there are broader questions about how the authorities respond to cases of widespread white-collar crime (is it not possible to hold more senior executives to account, for example?).

Nonetheless, Britain’s fraud office appears to have come a long way since a High Court judge blasted its “sheer incompetence” over the Tchenguiz case.

One concern for the SFO could be the rise of Theresa May, whose campaign to become the Conservative Party leader – and next Prime Minister – already enjoys the support of more than 100 Tory MPs. She is believed to harbour a plan to combine the fraud squad with the National Crime Agency, and while the rumour is ridiculed by SFO boss David Green, few in Westminster believe that May looks favourably upon his organisation.

Political chaos surrounding the UK’s Brexit vote could delay any reform of the SFO, which suddenly looks like a relatively minor and tangential issue. But if wolves do appear, the fraud office’s improved record means that it will not be the easy target it once was.

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