More trouble for prosecutors actually getting a conviction against bankers
Prosecutors in England failed in their efforts to convict six brokers of fixing Libor rates.
1/27 – Wall Street Journal – Six Ex-Brokers Acquitted of LIBOR Rigging in London – One key person was convicted at trial a while back and is now in prison. The six brokers just acquitted are the people he was supposedly conspiring with. Only the 6 weren’t conspiring with anyone about anything, according to the jury.
After a three-month trial the jury deliberated for only one day before returning acquittals for all six. Not bothering to look through the thousands of pages of evidence suggests to me the jurors thought it was an astoundingly poor case.
With the spectacular failure of the government’s case here, that leaves only a small handful of lower-level traders that have been convicted. (By my recollection there have been a few guilty pleas and a few convictions in the US and 1 or a few in England. Anyone have a precise count?) There have been no convictions of senior level staff. There have not been a bunch of trials of individuals.
The one broker in jail released a statement saying he was
… bewildered that he is now in a situation where he has been convicted of conspiring with nobody.
Article points out that six high-profile acquittals is a serious setback for the British Serious Fraud Office’s efforts to bring even more trials. They had planned to use convictions in this case to leverage other guilty pleas.
So now I’m left scratching my head. If jurors considering all of the evidence the government could gather reached a not guilty verdict with a mere one day of deliberation, I wondered just how weak all the cases and all the accusations might be.
By my calculation, settlements from nine banks over Libor issues have totaled $9.05B thus far.
Previous miss, hit, and miss for individual prosecutions:
- 11/15 – Explaining complex financial details to jurors is an obstacle to putting senior executives in jail
- 11/15 – So it *is* possible to persuade a jury to return a guilty verdict against a banker
- 11/14 – So you think tons of bankers should be in jail? Getting a jury to agree seems to be a problem.
More on the acquittals in London:
1/28 – Wall Street Journal editorial – A Libor Liberation / Not every banker is a saint, but neither are they all criminals. – Editorial suggests this acquittal ought to bring to an end the widespread effort of blaming everything that’s gone wrong since 2008 on those horrible, terrible, no good bankers.
In my opinion, there is a tremendous amount of blame to go around, only some of which belongs to those mean ol’ bankers.
Editorial points out the evidence of anyone being harmed from the Libor-rigging is a little on the thin side.
Apparently the class action suits in the US have not done very well. Good point there – I have been waiting to hear about another billion dollars or more of settlements from private suits, but have only seen articles on about $0.1B of actual settlements. I wonder if those claims have all collapsed?
Editorial board wraps up by saying that after all of the massive publicity and public posturing they feel
… relief that ordinary citizens in a jury room are still willing and able to exercise independent judgment.
What would be even better is if finally some slices blame were allocated to a range of government players. Editorial’s final comment is it would be…
Even better if six acquittals embarrass politicians who have spent the years since 2008 blaming “criminally greedy bankers” for a crisis born in part of their own regulatory malfeasance.
Update: 1/29 – The Guardian – Serious Fraud Office back in the dock after Libor acquittals – The SFO has 500 staff, of which 100 are working on Libor. The speed of the not guilty verdicts is a severe blow to the reputation of the SFO. Several of the jurors smiled at one of the defendants and gave him a fist pump as they left the room. Not a good indicator of the strength of the case.
There is another trial scheduled. A hundred full time investigators and six acquittals. Not a good sign for the next trial.
Apparently the head of the SFO is on a contract that expires in April. Article suggests it is possible his contract may not be renewed. There are apparently calls to shut down the SFO.