This article was orginially written for and featured in The Guardian.
By Kirstin Ridley
David Green, the man tasked with restoring faith in Britain’s much-maligned fraud fighting agency, expects “significant developments” in the New Year in a global probe into banker attempts to rig key benchmark lending rates.
Green, who has overhauled the Serious Fraud Office (SFO) since taking the helm in April, said the key to success in the “hugely challenging” investigation into the manipulation of the London interbank offered rate (Libor) lay in maintaining focus.
“(This) … may mean not concentrating on the huge picture that Libor internationally presents,” he told Reuters in an interview on Thursday. “It means focusing on specific parts of that larger picture.”
Green declined to be drawn on whether these developments heralded the first arrests in the case – often made at an early stage in UK investigations. “I think you’ll see some developments certainly in early 2013,” he said.
But he is keen to use new “methods of investigation and sources of intelligence” that he believes have not to date been regularly used by the SFO, outsourcing to experts such as London police forces.
Libor, which underpins around $550 trillion (£347 trillion) of loans and financial contracts, burst into the headlines in June when Barclays (LSE: BARC.L – news) was fined a record $450m for allowing traders to rig it and its euro cousin Euribor and for low-balling rates during the 2007/08 credit crunch.
Other banks remain under investigation in Europe (Chicago Options: ^REURUSD – news) , the United States, Canada and Japan (EUREX: FMJP.EX – news) , while UK and U.S. regulators stand accused of either condoning or failing to stop manipulation as the financial crisis brought banks to their knees four years ago.
Green, who insists he is far more pragmatic and nuanced than the prosecutorial bruiser portrayed since his appointment, dismisses suggestions he is in a race with US peers at the Department of Justice (DoJ) to secure arrests and prosecutions.
And he is quick to dismiss concerns about double jeopardy, which under British law prevents individuals and companies being prosecuted twice for the same or similar offence.
“It’s one of the many issues in a complex inquiry which will be considered in the appropriate time, if it arises,” he said.
When BAE Systems, Europe’s largest military contractor, agreed to plead guilty to offences in central and eastern Europe brought by the DoJ in 2010, the SFO was forced to drop its own investigation in those areas.
Green has been bringing in fresh blood to an agency that is rebuilding morale since being slammed by judges for a flawed investigation into the high-profile Tchenguiz brothers, who are expected to launch eyewatering lawsuits.
The SFO, whose future was cast into doubt last year, has been dubbed the “Seriously Flawed Office” since some of its cases in the 1980s and 1990s collapsed, or victories were only partial. The finance ministry, which controls its purse-strings, has slashed its budget to 31 million pounds.
“It is no secret that there are plenty of people who would like to see the organisation folded into a larger crime fighting agency,” notes Robert Amaee, a former senior SFO lawyer who works for law firm Covington & Burling in London.
“It’s up to David Green and his new lieutenants to show that the SFO is best left as a standalone elite crime fighting agency and that its best days lie ahead of it.”
And Green is convinced he has won a stay of execution.
He has beefed up quality control, brought on board experienced criminal practitioners including Alun Milford as general counsel, Kevin Davis as chief investigator and retired judge Geoffrey Rivlin as special adviser in an attempt to ensure the SFO is fit for purpose.
He has ditched the reassurance offered by his predecessor that companies self-reporting criminality will avoid prosecutions and closed a confidential whistleblower hotline.
In true political style, he welcomes a critical government report into the agency’s case-handling methods, which is due to be published this month, saying he has already pre-empted and implemented many if not all of its recommendations.
All he needs now are some high-profile prosecutions.
“I think he’s had a good start,” said James Carlton, a partner at the law firm Fox Williams.
“He has been as direct as he can be without making himself hostage to fortune and I think he has given certainly a whiff in the air that things are going to be different. I think that’s all he can do at the moment … It remains to be seen whether he is effective.”