SFO defends Libor prosecutions after five acquitted

Topics: Criminal justice,Courts business

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The Serious Fraud Office (SFO) has defended its prosecution of six ex-brokers accused of helping convicted trader Tom Hayes manipulate bank rates after five of the group were acquitted today.

The jury continues to deliberate charges against a sixth.

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Colin Goodman, Danny Wilkinson, Noel Cryan, Terry Farr and James Gilmour were found not guilty at Southwark Crown Court (pictured) of conspiracy to defraud related to the manipulation of the London interbank offered rate (Libor). Darrell Read awaits his verdict.

The acquittals will be read as a setback for the SFO, which had enjoyed a run of successful prosecutions and ended 2015 with its first plea-deal deferred prosecution agreement in a high-profile bribery case.

Matthew Frankland, partner at Byrne and Partners, acted for Wilkinson. Frankland said: ‘The prosecution seemed not to understand the complexities of the case, including the hedging of trades, the commission earned by brokers and the general banker-broker relationship.’

He added: ‘Ultimately, there is a hypocrisy in charging brokers. Brokers do not work for banks, they play no part in the Libor submission process and are not and never were regulated by the BBA [British Bankers' Association] in relation to their Libor predictions.’

Director of the SFO David Green QC said: ‘The key issue in this trial was whether these defendants were party to a dishonest agreement with Tom Hayes. By their verdicts the jury have said that they could not be sure that this was the case. Nobody could sensibly suggest that these charges should not have been brought and considered by a jury.’

Christopher David, white collar crime lawyer at international firm Wilmer Hale, added: ‘Any perceived blow may be softened by the fact that they [SFO] have already secured the conviction of their primary target, Tom Hayes, and this trial was always considered, informally, as secondary to the Hayes trial.’

Hayes, former trader at UBS Group AG and Citigroup Inc, was jailed with a 14-year sentence in August 2014, although it was reduced on appeal to 11 years. Defendants acquitted in the second Libor trial worked for Prebon Plc and RP Martin Holdings Ltd. Read worked for ICAP.

Readers' comments (5)

  • "By their verdicts the jury have said that they could not be sure that this was the case (that they were guilty of a dishonest agreement)". You can't say that David Green QC. You don't know. A "not guilty" verdict comprises a whole spectrum of possibilities from nearly guilty to not guilty on a technicality to completely innocent. Until juries can be asked which one it was we shall never know. All we know is what we don't know. David Green Q C seems to have presumed that he does know. Given the length of the trial and the speed of the decision I think his conclusion may be wrong. But I have to admit I don't know.

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  • I agree David. From this very short report it appears the SFO didn't - still do not - understand how this financial world works, and went after the wrong targets.

    Public sentiment about the financial world is such that someone must be guilty, and that thought may have clouded a forensic approach to the case and the evidence by the prosecuting team.

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  • Or maybe tis was a case of "let a jury decide as we are unsure" and in any event it is cheaper to charge somebody than to further investigate.

    Or maybe we now have the SFO infallibility principle - defendants are always guilty but sometimes the jury gets it wrong.

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  • So we are driven to the conclusion that Tom Hayes conspired with himself, being the only guilty party, which is, of course, impossible.
    There has been massive wrongdoing here, but as ever the authorities are shooting at the minnows, and not doing a very good job of it, instead of going after the big fish.

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  • What ever happened to 'the golden thread'.

    Ian, can I recommend a course in basic logic and fishing.

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