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| SFO chief admits agency's future is in doubt | SFO chief admits agency's future is in doubt |
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| The head of the Serious Fraud Office has admitted that the future of the crime-fighting agency is shrouded in uncertainty despite the conviction of former City trader Tom Hayes for Libor-rigging and its ongoing work on a string of high-profile corporate cases. | The head of the Serious Fraud Office has admitted that the future of the crime-fighting agency is shrouded in uncertainty despite the conviction of former City trader Tom Hayes for Libor-rigging and its ongoing work on a string of high-profile corporate cases. |
| Theresa May, the home secretary, is understood to be keen to fold the SFO into a larger National Crime Agency after a series of setbacks for the agency, including an embarrassing climbdown over a bungled investigation into tycoons Vincent and Robert Tchenguiz. | Theresa May, the home secretary, is understood to be keen to fold the SFO into a larger National Crime Agency after a series of setbacks for the agency, including an embarrassing climbdown over a bungled investigation into tycoons Vincent and Robert Tchenguiz. |
| Related: 14 years in jail for Libor rigging? The judge makes a persuasive case | Joshua Rozenberg | Related: 14 years in jail for Libor rigging? The judge makes a persuasive case | Joshua Rozenberg |
| David Green, director of the SFO, admitted that the future of the fraud-busting agency is uncertain, but that there was a “certain professional satisfaction” over the conviction of Hayes. | David Green, director of the SFO, admitted that the future of the fraud-busting agency is uncertain, but that there was a “certain professional satisfaction” over the conviction of Hayes. |
| The 35-year-old was sentenced to 14 years in jail earlier this week for rigging Libor in what was considered a pivotal case for SFO. In a letter to the Guardian, Nick Hayes, the father of Tom, called the sentence “brutal” and that “the real architects of financial manipulation and skulduggery in Wall Street and the City remain untouched”. | The 35-year-old was sentenced to 14 years in jail earlier this week for rigging Libor in what was considered a pivotal case for SFO. In a letter to the Guardian, Nick Hayes, the father of Tom, called the sentence “brutal” and that “the real architects of financial manipulation and skulduggery in Wall Street and the City remain untouched”. |
| The SFO is now focusing on a second Libor trial due to start in the autumn, but also high-profile investigations into some of Britain’s biggest companies, including Barclays, GlaxoSmithKline, Rolls-Royce, and Tesco. | The SFO is now focusing on a second Libor trial due to start in the autumn, but also high-profile investigations into some of Britain’s biggest companies, including Barclays, GlaxoSmithKline, Rolls-Royce, and Tesco. |
| “Plainly, it was a very important one,” Green said about the Hayes judgment. “It was the biggest investigation we have ever done.” | “Plainly, it was a very important one,” Green said about the Hayes judgment. “It was the biggest investigation we have ever done.” |
| When asked whether there was still uncertainty over the future of the body, he added: “Yes of course there is. This is ultimately a matter for ministers. It is up to me to make a case for the SFO.” | When asked whether there was still uncertainty over the future of the body, he added: “Yes of course there is. This is ultimately a matter for ministers. It is up to me to make a case for the SFO.” |
| Richard Alderman, Green’s predecessor, had refused to investigate Libor-rigging, leaving it to the US and other agencies. However, Green said: “The only way to make the SFO relevant, frankly, was to do the work it was set up to do.” | Richard Alderman, Green’s predecessor, had refused to investigate Libor-rigging, leaving it to the US and other agencies. However, Green said: “The only way to make the SFO relevant, frankly, was to do the work it was set up to do.” |
| Green claimed the “independence” of the SFO, the multiple disciplines in its workforce, and the fact it is able to prioritise complex fraud investigations over other crimes mean it is uniquely placed to take on cases often involving “immensely powerful and influential companies”. | Green claimed the “independence” of the SFO, the multiple disciplines in its workforce, and the fact it is able to prioritise complex fraud investigations over other crimes mean it is uniquely placed to take on cases often involving “immensely powerful and influential companies”. |
| Green took charge of the SFO in 2012 and his contract will expire in April unless it is renewed by the government. During his tenure, the SFO’s workforce has grown from roughly 290 to 490 people to deal with a growing workload, with 80 staff dedicated solely to Libor investigation. | Green took charge of the SFO in 2012 and his contract will expire in April unless it is renewed by the government. During his tenure, the SFO’s workforce has grown from roughly 290 to 490 people to deal with a growing workload, with 80 staff dedicated solely to Libor investigation. |
| The SFO boss said the workload facing the organisation was “enormous” but that he has had “no difficulty at all” in getting funding from the Treasury for “blockbuster” cases, such as the inquiry into accounting practices at Tesco. | The SFO boss said the workload facing the organisation was “enormous” but that he has had “no difficulty at all” in getting funding from the Treasury for “blockbuster” cases, such as the inquiry into accounting practices at Tesco. |
| Barry Vitou, partner at law firm Pinsent Masons, said the SFO would be “relieved” to have secured a conviction for Libor-rigging and called on the government to end uncertainty about its future | Barry Vitou, partner at law firm Pinsent Masons, said the SFO would be “relieved” to have secured a conviction for Libor-rigging and called on the government to end uncertainty about its future |
| Vitou said: “These are exactly the sort of cases they were set up to do. I think that is good, but what is bad is that every six to 12 months there are rumours that Theresa May wants to shut it down. | Vitou said: “These are exactly the sort of cases they were set up to do. I think that is good, but what is bad is that every six to 12 months there are rumours that Theresa May wants to shut it down. |
| “It seems to me that we need to shift the debate away from uncertainty about the SFO where when they lose a case they are in trouble and when they win a case they are safe. That seems to me to be shortsighted. | “It seems to me that we need to shift the debate away from uncertainty about the SFO where when they lose a case they are in trouble and when they win a case they are safe. That seems to me to be shortsighted. |
| “It is an oversimplification to say they have screwed up [in the past]. They haven’t got the credit they have deserved.” | “It is an oversimplification to say they have screwed up [in the past]. They haven’t got the credit they have deserved.” |
| Green reiterated that the SFO will look to use deferred prosecution agreements (DPAs) for the first time to resolve the corporate investigations. | Green reiterated that the SFO will look to use deferred prosecution agreements (DPAs) for the first time to resolve the corporate investigations. |
| DPAs, introduced in the UK in 2014, allow a company to suspend a prosecution in return for meeting specified conditions, such as paying a fine. DPAs have been used in the US, but in Britain they require judicial approval. | DPAs, introduced in the UK in 2014, allow a company to suspend a prosecution in return for meeting specified conditions, such as paying a fine. DPAs have been used in the US, but in Britain they require judicial approval. |
| Green said that the SFO “expect to have two completed” by the end of the year and that it is also “considering a number of different cases for the suitability of a DPA”. Tesco and Barclays have both been linked with potential DPAs. | Green said that the SFO “expect to have two completed” by the end of the year and that it is also “considering a number of different cases for the suitability of a DPA”. Tesco and Barclays have both been linked with potential DPAs. |
| The SFO boss insisted that the DPA’s were “not buying and selling justice” and there is a “pretty high bar” for organisations to cross to be eligible for a deal. | The SFO boss insisted that the DPA’s were “not buying and selling justice” and there is a “pretty high bar” for organisations to cross to be eligible for a deal. |
| DPA’s will be considered where the company has admitted wrongdoing, the culprits have left the organisation, internal regulations have been changed, and victims have been compensated. | DPA’s will be considered where the company has admitted wrongdoing, the culprits have left the organisation, internal regulations have been changed, and victims have been compensated. |
| “It is difficult to see how it is in the public interest to prosecute a company that has self-reported to the SFO,” Green said. | “It is difficult to see how it is in the public interest to prosecute a company that has self-reported to the SFO,” Green said. |
| Robert Amaee, partner at law firm Covington and the former head of anti-corruption and proceeds of crime at the SFO, said that DPAs are a “potentially significant step for the SFO”. | Robert Amaee, partner at law firm Covington and the former head of anti-corruption and proceeds of crime at the SFO, said that DPAs are a “potentially significant step for the SFO”. |
| He added: “If the system is shown to work then it will be a useful tool. But it has limitations, particularly when compared with the US. Bringing successful DPAs to a conclusion will be very significant.” | He added: “If the system is shown to work then it will be a useful tool. But it has limitations, particularly when compared with the US. Bringing successful DPAs to a conclusion will be very significant.” |
| Major inquiries under way | |
| Tesco | |
| The SFO is investigating accounting practices at Britain’s biggest retailer after the discovery of a £326m black hole in its accounts, linked to the way Tesco booked income on deals with its suppliers. It was discovered last September when a whistleblower alerted the new chief executive, Dave Lewis. | |
| Rolls-Royce | |
| The engineer is accused of paying bribes to win aerospace contracts overseas. The SFO initially approached Rolls-Royce in late 2012 about allegations of malpractice in Indonesia and China after a whistleblower claimed the company had bribed Tommy Suharto, the son of Indonesia’s former president General Suharto, to win contracts. | |
| Barclays | |
| There are concerns about the 2008 agreement between Barclays and Qatar Holding in which the sovereign wealth fund backed an emergency fundraising by the bank. The SFO is looking into the commercial terms of the deal and how Barclays raised billions of pounds from Middle Eastern investors at the height of the banking crisis. | |
| GlaxoSmithKline | |
| The drug maker is facing allegations that it paid hundreds of millions of pounds to doctors and officials in countries around the globe, including China, to boost drugs sales. The Chinese authorities have already fined GSK $490m (£316m) over bribery allegations. | |
| Quindell | |
| The SFO announced on Wednesday that it had launched a formal inquiry into the claims management group after it published accounts. The agency said it has opened a “criminal investigation into business and accounting practices”. At the same time, the Financial Reporting Council is investigating individual accountants and two firms in connection with the auditing of Quindell’s accounts. The company reported a loss of £238m in its delayed 2014 accounts after it wrote down the value of its assets by £157m. |