By Suzi Ring, Bloomberg News
A U.K. Serious Fraud Office decision to charge Barclays Plc and four of its former executives this week could be a last hurrah for the embattled agency, targeted for closure by the Prime Minister.
The SFO charged Barclays along with former Chief Executive Officer John Varley, former chairman of investment banking for the Middle East Roger Jenkins, and two more senior managers, Thomas Kalaris and Richard Boath, with conspiracy to commit fraud in relation to a 2008 fundraising from Qatar. The case centers on side deals the bank made as part of a 12 billion-pound ($15.2 billion) transaction.
The five-year-old probe, started by Director David Green, is one of the highest-profile prosecutions the SFO has pursued in its 30-year history and adds to several significant outcomes this year. The SFO extracted a 500 million-pound fine from Rolls-Royce Holdings Plc in January for bribery, followed by 129 million pounds from Tesco over mis-stated accounts. The agency may be hopeful these cases are enough to deter the government from its election pledge to wrap the SFO into the U.K.’s National Crime Agency.
“On the back of a Conservative election manifesto that promised the abolition of the SFO and absorption into the NCA, this is a timely move,” said Michael Potts, a London defense lawyer. “Many will be surprised that they have sought to take on Barclays — and no doubt an army of defense lawyers — but it is indicative of a more emboldened SFO.”
A spokeswoman for the SFO declined to comment. Barclays said Tuesday it was “considering its position” in relation to the charges. Lawyers for the men either declined to comment or said their clients would vigorously defend the charges.
The SFO has long been a thorn in the side of Prime Minister Theresa May after she failed to get sufficient backing from ministers as Home Secretary in 2011 to subsume it into a new crime fighting agency — the NCA. A government review of U.K. economic-crime enforcement, involving a consultation with senior people from the SFO, NCA and Financial Conduct Authority, started before the election and is still under way despite May’s pledge.
May’s poor performance in this month’s election, however, may already be taking her focus away from the SFO. There was no mention of the prosecutor in the Queen’s speech, marking the formal opening of Parliament Wednesday, leading several attorneys to say the agency may have won a reprieve.
“This is good news for the fight against complex economic crime,” said Omar Qureshi, the head of corporate crime at law firm CMS.
But the government said no decision on the SFO’s future had been made.
“We will consult widely on the next steps forward,” May’s spokesman James Slack told reporters in London after the speech, which set out the government agenda for the next two years.
The plans have drawn criticism from the legal industry, particularly because the SFO has racked up a number of victories, leading some to question whether the government is simply trying to cut costs. Another concern is that experienced white-collar crime investigators and prosecutors will leave as a result of any merger.
The SFO still has a number of investigations open against blue-chip companies including GlaxoSmithKline Plc and Airbus Group SE. Green’s tenure is due to end in April, leaving concerns about who would manage the long-running cases should May succeed at eliminating the agency.
The situation leaves one certainty: Should the Barclays cases go to trial, between court delays and pre-trial motions, the SFO’s future will be decided long before the defendants face a jury.
For more news, visit Bloomberg.