Britain’s economic fate doesn’t depend on Heathrow

Hit-and-miss, heavy-handed, but a necessary use of justice to deter repetition. That was my summing-up, last year, of the Serious Fraud Office’s probe into the Libor and Euribor scandal, in which just nine low-ranking traders from four banks were convicted, despite evidence that rate-fixing malpractice had been endemic throughout the money markets for years. In the case of the SFO’s inquiry into the controversial capital–raising that enabled Barclays to escape a taxpayer bailout in 2008, the summary has to be ‘miss-and-miss, heavier-handed than ever’. But still I ask: was it worthwhile as a warning to others?

The nub of the case was the payment to Qatari investors, to secure their participation in the rapidly assembled multi-billion Barclays deal, of ‘advisory fees’ that gave them a fatter return than other investors — and whether those fees represented value to Barclays in terms of other business generated, or were a sham. At first the bank itself was accused of fraud along with five of its senior people, including chief executive John Varley. But in the end no one was convicted, the last three in the dock — Roger Jenkins, Tom Kalaris and Richard Boath — having been acquitted at their second trial last week. A key strand of their defence was that the bank’s directors, lawyers and other advisers ‘knew everything’. Whatever whiff attached to the deal, it had been scrutinised at every level and if the SFO could not advance a corporate charge against the bank, arguably it was never going to nail the individual players.

SFO director Lisa Osofsky has spoken of the ‘antiquated’ 19th-century body of law she has to work within. She has said nothing of political pressure to see senior bankers banged up after the financial crisis — but that, combined with her long-ago predecessor George Staple’s view that in complex fraud cases, ‘even a single conviction’ is worth having ‘if it goes to the heart of the wrongdoing’, must explain the SFO’s tenacity against the odds.