The Serious Fraud Office (SFO) will be under pressure to avoid another high-profile failure on Monday at a fraud trial it has brought against former Barclays executives over the bank’s 2008 capital raising.
Former Barclays chief executive John Varley, former Barclays Wealth boss Thomas Kalaris, ex-investment banking chief Roger Jenkins and ex-European financial institutions head Richard Boath face charges over conspiracy to commit fraud in relation to the £12bn rescue packaged secured with investors, including Qatar, at the height of the financial crisis. All four executives have pleaded not guilty.
'Seriously Flawed Office'
The long-awaited trial is being held at the Southwark crown court in London and is expected to last at least 12 weeks.
But the SFO has a poor track record for successfully prosecuting the big guys with two major cases scrapped last year alone.
Two former Tesco executives were acquitted of charges of fraud over the supermarket’s 2014 accounting scandal in December after the judge dismissed their case due to lack of evidence. The SFO reportedly spent about £10mln on pursuing the case.
The SFO also saw a separate case against Barclays over the 2008 rescue deal thrown out by the Southwark court in May last year. It later lost a high court appeal to reinstate the charges that the bank conspired to commit fraud.
READ: SFO presses to have criminal charges reinstated against Barclays over financial crisis fundraising
Another failure includes the collapse of a 2016 trial against brokers accused of helping convicted trader Tom Hayes rig the Libor rate.
In 2015, the SFO was fined £180,000 after thousands of documents from a bribery investigation into a BAE Systems deal were wrongly sent to a witness in the case. The SFO was also accused of ending the probe into the firm's aircraft deals with Saudi Arabia in 2010 due to intense pressure from the government, though it has denied the claims.
One of the first high profile SFO cases to make it to trial was against businessmen for suspected share-trading fraud ahead of the takeover of the Distillers Group by Guinness. The SFO had spent almost a decade on the case and managed to secure four convictions in 1990 but two trials collapsed and four people were acquitted.
In 1992, a trial concerning a 1987 rights issue by employment agency Blue Arrow to fund a proposed takeover of Manpower was one of the longest in English criminal history.
The case, which accused bankers advising on the deal of covering up the failure of the rights issue, was understood to have cost £40mln but just four out of 14 people were found guilty and all successfully appealed to have their convictions overturned.
Following a series of failed prosecutions, some critics have unkindly dubbed the SFO as the “Seriously Flawed Office”.
Some SFO success stories
However, there have been some success stories. Chris Ronnie, who was boss of sportswear firm JJB Sports from 2007 to 2009, was jailed for four years in 2014 and banned as the company director over a £1mln fraud.
Magnus Peterson, the founder of hedge fund Weavering, was in 2015 convicted on charges of fraud, forgery, false accounting and fraudulent trading linked to the collapse of his company in 2009.
Polly Peck tycoon Asil Nadir was jailed for 10 years in 2012 for stealing £29mln from the textiles firm following a SFO probe into the demise of the company.
The SFO will hope it can shake off the moniker as the “Seriously Flawed Office” with the Barclays trial, which follows a five-year investigation into the details of the rescue package.
Barclays avoided a government bailout during the financial crisis, thanks to the rescue deal provided by investors, including Qatar Holdings. The bank later provided a US$3bn loan to Qatar Holdings, which was allegedly used to buy Barclays shares.
The SFO said the loan amounted to unlawful financial assistance.
Barclays also faces a £1.5bn civil case over the Qatar fundraising with a trial expected to start in October. Businesswoman Amanda Staveley through her firm PCP Capital Partners has accused the bank of fraudulent misrepresentation and deceit over the terms given to potential investors of the rescue deal.