ianfraser.org 16 Mar 12: Has the UK rediscovered its appetite for prosecuting ‘white collar’ crime?

Category: Newspaper & Media Reports

In the second in a series of guest posts, Rowan Bosworth-Davies, a financial crime consultant and former Scotland Yard detective provides a historical perspective on the UK authorities lack of appetite for prosecuting financial crime

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There was a brief interval in UK history when the authorities had no qualms about prosecuting ‘white collar’ crime. In the 1980s the Serious Fraud Office prosecuted the mainstream bank, County NatWest, a division of NatWest. The main players were convicted of the criminal offence of covering up a failed issue of £873m of new stock (intended to finance the takeover of Manpower).

The scandal became known as the ‘Blue Arrow’ affair. The jury had no difficulty in convicting all the leading defendants, who included some of the ‘great and the good’ of the City at that time. However, for reasons that are almost beyond comprehension, the Court of Appeal overturned the guilty verdicts.

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This was the most egregious example of people from the upper socio-economic classes being given a ‘get out of jail card’ that I can think of, although I have witnessed other equally appalling efforts to help their kind.

After the Bue Arrow case, a friend of mine in the SFO told me that the message had come down from on high that there would never again be any similar kind of prosecution of any City institution or its senior executives. The reason the ‘Blue Arrow’ affair proved so terrifying for the managerial classes and senior financiers was that it demonstrated that ordinary juries could understand the ramifications of complex fraud cases, and that they could convict.

The lawyers in the trial had spent hundred of hours of court time trying to cloud the issue and obfuscate, but the jury saw through that and potted all the defendants that mattered.  The question is, in the wake of a disastrous decade of “light touch” regulation, will we ever see it’s like again?

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