It has not been an easy ride for David Green, who completes his second year as director of the Serious Fraud Office in April. He inherited it at a low ebb. Phillippa Williamson, the former CEO, was caught up in an expenses row and a parliamentary watchdog said it had “been undermined by a catalogue of errors and poor judgement”, hitting staff morale.
Then, an attempt to bring a case against Jewish-Iranian property tycoon Vincent Tchenguiz over his relationship with Icelandic bank, Kaupthing, publicly collapsed.
Tchenguiz, who claims the case damaged his business interests, is now suing the SFO for £200 million.
And the SFO, sometimes better described as the Serious Farce Office, was widely seen as being ineffectual during the 2007-2008 banks crisis. The government once briefly threatened to fold it into a new National Crime Agency.
It has been Green’s job to restore public faith, as both an investigator and prosecutor, by showing a steadfast commitment to stamping out financial crime.
Many Brits feel that bankers, who were responsible for delivering more than five years of economic misery, should pay a price.
Products at the heart of the financial crisis, including credit default swaps used to package-up and insure questionable sub-prime mortgage packages, were brought into the City because UK regulation is softer than Wall Street.
Such issues have been addressed by the SFO, but insufficient evidence was found for prosecution.
But a significant number of arrests were made following the 2012 Libor scandal, after brokers such as Icap and UK banks from Barclays to RBS, were accused on involvement in manipulation of key market for interest rates.
Many of those involved are classed by the SFO as “senior traders”. But making a direct connection between the people on the trading floor and those in the upper-echelon of management is difficult. The email and messaging traffic mysteriously tends to peter out the closer investigators get to the top of organisations. Nevertheless, the SFO is keeping busy. In addition to the Libor cases, it soon expects to be called in to look at rigging in the even more complex foreign exchange markets.
With turnover of $5.2 trillion a day, much of it based in London, deconstructing how this market was manipulated could be infinitely more complicated and will require supercomputers to sift the data.
At present, the probe is in the hands of the Financial Conduct Authority, but if prima facie evidence of wrongdoing is found, the SFO will become more closely involved.
The failure of the financial crime prosecutors to bring cases forward has been highlighted by judicial authorities on both sides of the Atlantic in recent weeks.
Here in the UK, the Lord Chief Justice John Thomas said in a speech earlier this month that there were too few prosecutions for fraud and shaking-up the law would ensure “rigorous pursuit of more prosecutions for fraud, particularly fraud in the financial markets, and for bribery and corruption”.
The UK, at present, lacks catch-all acts such as America’s wire fraud, often used in financial cases.
Banking laws, recently passed as a result of the recommendations of the Parliamentary Banking Commission, have created a new offence of “reckless banking”, which if it had been in place, might have resulted in some of those heading UK banks at the time of the crisis being pursued by the authorities.
How enforceable the legislation will be is an open question.
Alex Brummer is City Editor of the Daily Mail