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Libor convictions reviewed by UK fraud agency in wake of disclosure problems

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The UK Serious Fraud Office is reviewing its Libor prosecutions, including the conviction of former UBS and Citigroup trader Tom Hayes, after problems with the agency’s disclosure software systems forced it to revisit old cases.

The prosecutor is examining convictions from its investigation into the rigging of the key interest-rate benchmark to assess whether any documents were missed in its disclosure exercise, the agency’s chief operating officer said in an interview with the Financial Times.

The Libor prosecutions are among a group of cases — likely more than a dozen cases — that will be re-examined in relation to problems with the agency’s disclosure tools. The SFO said it was also prioritising the re-examination of cases where people are still in custody, which include its investigations into Harlequin Group, Balli Steel Plc and Global Forestry Investments.

Errors first emerged with the way the SFO used its legacy disclosure tool from provider Autonomy Introspect in 2022. The agency is also reviewing ongoing cases after a software issue emerged with its current disclosure system from provider OpenText Axcelerate.

“We’re looking at Libor . . . [as] we’ve currently been asked to come back to that,” Abigail Howarth said at the SFO’s London offices on Wednesday. “We’re looking at cases one by one to see whether we can identify any impact . . . we’ve started with the few that are the more recent ones where we’ve got some activity happening on an ongoing basis.”

Hayes, who was the first person in the world to be found guilty over the Libor scandal and served five-and-a-half years in prison, has said he is seeking an appeal of his conviction in the Supreme Court after an attempt at the Court of Appeal failed in March.

“The SFO have confirmed they are reviewing the disclosure on the IBOR cases as a priority and we welcome this development,” said Karen Todner, a lawyer for Hayes.

The agency has long been plagued with disclosure problems, which has led to the collapse of a string of high-profile cases. The Autonomy issue, which relates to how the tool recognised punctuation, contributed to the collapse of the agency’s prosecution against three former G4S executives last year.

The SFO has set up a management-level committee called the ‘Gold Group’ made up of roughly 13 individuals and chaired by Howarth to look at and manage the review into both the Autonomy and Axcelerate problems. The prosecutor is bringing in outside experts to ensure the approach and fixes have been applied properly, Howarth said.

While the Autonomy problem related to how search terms were used, the Axcelerate issues relate to encoding and problems with the software itself, which the agency said it has resolved.

The SFO has already rerun searches on two live prosecutions — London Mining and Greenergy — and found no problems with its disclosure, the agency said.

“It is early days, but so far what we’ve found is that there isn’t anything else to find that is a concern,” Howarth said.

In response to questions from MPs about the disclosure problems, Nick Ephgrave, director of the SFO, said the prosecutor was reviewing its strategy and trying to discuss disclosure with judges and the defence earlier in the prosecution process.

The former police officer told the Commons Justice Committee: “There’s rarely a day goes past in the office where we don’t discuss — in one format or another — disclosure.”

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