The SFO: Fiasco or Debacle?

With ongoing controversy surrounding the SFO’s conduct in the Libor trials – particularly around the use of an expert witness that turned out to be texting individuals outside the court to clarify basic points – below noted legal commentator Dominic Carman delves deep into the matter.

The Court of Appeal have raised serious concerns about the Serious Fraud Office, in particular its prosecution of Libor and the use of a self-proclaimed ‘expert witness’ Saul Haydon Rowe in every case. Ultimately, some convictions may be quashed, while most of those already tried have already been acquitted.

In an earlier article, the Telegraph explained the background.

“Ex-Barclays bankers Alex Pabon and Jay Merchant as well as Tom Hayes, the first trader to be convicted of rigging Libor, have urged Justice Committee chair Robert Neill to investigate the SFO over its use of expert witness Saul Haydon Rowe.”

However, Bob Neill MP could not accede to this request for two reasons.

First, he could not investigate the SFO’s ‘“selection, retention and oversight” of an expert’ because that decision would have resided with the SFO’s Director, David Green QC, or at least been approved by him. As Neill revealed in October 2016, he knows Green very well.

During the televised Justice Committee parliamentary session, Neill addressed Green with a genial smile: ‘You and I know each other well and have known each other for many years.’ Such familiarity would automatically preclude Neill from chairing any independent investigation into the SFO.

Second, and more significantly, the Justice Committee cannot do what the letter asks because it has no mandate to examine individual cases, or group of interconnected cases like the Libor trials.

The Telegraph article questioned Rowe’s conduct and expertise in greater detail.

“It is unclear the extent to which the SFO adequately investigated Rowe’s qualifications, expertise and fitness to identify as an expert witness in a complicated, high-profile criminal trial,” read the letter, which was sent to Mr Neill on November 10.

Around 100 of Mr Rowe’s emails and texts were disclosed by the SFO during the retrial of former Barclays traders Ryan Reich and Stylianos Contogoulas, with both acquitted of conspiracy to defraud. The messages show he was “not an expert” and ignored directions not to talk to anyone about his evidence, the letter argues.

The move comes months after reports were sent to the Metropolitan Police over Mr Rowe’s credibility as a witness by some Libor traders. The Criminal Cases Review Commission (CCRC) is also deciding whether to refer Mr Hayes’ case back to the Court of Appeal in light of the questions now surrounding Mr Rowe.”

During the April re-trial of Reich and Contogoulas, Rowe wilted. Under cross-examination by Adrian Darbishire QC, he acknowledged that he had previously texted friends in the original trial asking for their help while giving evidence in explaining some technical terms and checking that he was answering basic questions correctly.

Despite this admission, Rowe denied misleading the SFO about his expertise. In summing up, Judge Anthony Leonard told the jurors that they had to determine whether Rowe had “sufficient expertise” to testify and if they were not convinced then they should “disregard it.” Delivered with great speed, the unanimous not guilty verdict was a defining moment.

Back in April 2012, Green had made his first appearance in front of the Justice Committee, as reported by the Guardian:

‘He accepts his agency will be judged largely on the performance of its ongoing investigation into allegations of Libor interest rate-fixing. Green said he was confident the Libor case would avoid the errors of the “Tchenguiz fiasco”.’

The SFO’s investigation of the Tchenguiz brothers resulted in compensation payments of several million pounds and a public apology from Green for his predecessor’s conduct. But in the SFO’s most recent annual report, no mention was made of the Libor trials which had concluded in the previous year – despite Green confirming that he would be judged largely on their performance.

They were airbrushed from the record because the SFO had failed to achieve convictions. Meanwhile the furore surrounding Rowe reignited in Pabon’s appeal last week, when Lord Justice Gross said: “We take a very serious view of what in the judgment we will describe as a debacle, whatever the outcome. We want to know how did it come about that he (Rowe) was instructed when he lacked expertise? We are very concerned as to how he can have been instructed, the due diligence, and how it came to light. We are troubled by it.”

Critically, the Court asked the SFO for its internal report into the debacle. But it emerged that there was “no such document”.

Much publicity surrounded the convictions of Hayes, Pabon and others; if either were acquitted on appeal, the publicity would be devastating. Not only would it undermine all the Libor prosecutions, but it would also serve to diminish Green’s legacy when he steps down next April. And for all the effort he has undoubtedly put in to restore the SFO’s tarnished reputation, the end result would be another fiasco…or debacle. Take your pick.