LONDON Britain's leading fraud prosecutor hopes within months to charge more individuals over the Libor rate rigging scandal as it tries to reassure critics it won't hesitate to pursue senior industry figures or even institutions.
Almost five years since the world's financial system buckled and forced taxpayers to fund eye-watering bank bailouts, few banks or bankers have faced sanctions.
The Serious Fraud Office (SFO), under pressure to nail those responsible for manipulating the benchmark interest rate that helps oil the wheels of global finance, said on Thursday it would not shy away from high legal hurdles to punishing corporations.
"We will go where the evidence takes us, but we will always want to focus on more senior people and those with the greatest culpability when we can," an SFO spokeswoman said, adding that institutions remained part of its investigation.
"We anticipate making the next charging decisions (against individuals) in the Autumn."
The scandal surrounding the London interbank offered rate (Libor), against which trillions of dollars worth of products ranging from derivatives to mortgages are priced, has become a symbol for the brazen arrogance with which some in the financial industry have pursued their own interests.
The cash-strapped SFO, one of a number of prosecutors and regulators across the globe investigating the complex case, has received extra funding to help cover its Libor costs from a government keen to see results.
Three banks - Britain's Barclays and RBS and Swiss UBS - have paid around $2.6 billion to date to secure civil settlements with UK and U.S. regulators. The SFO has levelled criminal charges at three relatively low-level individuals in connection with the scam.
"I don't think the court of public opinion would at present say, given the scale of Libor, that charging three individuals represents good value for money," noted Jeremy Summers, a lawyer at Slater and Gordon in London.
In its charges against former Citibank and UBS trader Tom Hayes and former RP Martin brokers Terry Farr and James Gilmour, the SFO has named a string of top banks with whose employees the three allegedly conspired to defraud.
These include JPMorgan, Deutsche Bank, HSBC, Rabobank, ICAP and Tullet Prebon, along with the defendants' former employers.
Some lawyers have long said that only a corporate conviction would appease public and government outrage at the Libor scandal, while conceding that the odds for a successful prosecution are stacked against the agency.
"If the litmus test as to how well the SFO is doing is Libor, I think the public, and probably the Treasury (finance ministry), expect the prosecution of a bank or other institution," says Stephen Parkinson, a senior lawyer at Kingsley Napley. "That is going to be difficult."
In English law, a corporation is only criminally liable if bosses - the so-called "controlling mind" - are culpable. A new Bribery Act has introduced an offence of "failing to prevent" bribery, but much of the Libor gaming is likely to pre-date it and, as yet, it does not extend to other criminal offences.
SFO head David Green has often complained that email chains rarely go above a certain level. That could leave the SFO pursuing corporations on compliance failures or negligence charges, lawyers say.
Green faces a tough task to restore faith in the SFO's crime-busting capabilities.
With an annual budget of around 30 million pounds, a fraction of that of a regional police force, he must deal with a costly defence against a 300-million-pound damages claim, and politicians raking over a "catalogue of errors" under his predecessor.
(Editing by Tom Pfeiffer)