The Serious Fraud Office today launched a criminal investigation into the rate-fixing scandal that has rocked the City.
The dramatic move could lead to the prosecution of traders at Barclays and other banks accused of rigging the inter-bank lending rate.
SFO director David Green, QC, has been under growing pressure to investigate the scandal that led to the resignation of Barclays’ three top bosses.
Today’s move follows the record £290 million fine imposed on Barclays for lying about the interest rate at the height of the financial crisis in 2008. Announcing the decision, the SFO said Mr Green “has today decided formally to accept the Libor matter for investigation”.
The move, which follows the resignation of former Barclays chief executive Bob Diamond and the departure of chief operating officer Jerry Del Missier and chairman Marcus Agius, means that criminal action could follow against Barclays staff and those at other banks involved in rate-fixing.
No explanation was given as to the possible crimes that might be investigated or why the rate-fixing scandal, which took place in 2008, had not triggered an earlier criminal investigation.
It is thought likely, however, that any prosecution would be brought under the 2006 Fraud Act, which carries a maximum potential penalty of 10 years in prison.
The Treasury welcomed the investigation. Officials said the probe would receive any funding it needed if it turned into a “blockbuster case”. But there were questions from MPs about why the SFO did not start to investigate months ago.
Tory MP David Ruffley said: “It’s clear to any legal expert and to me that the alleged Libor rigging prima facie breached the Theft Act 1968, the Fraud Act, 2006, and was potentially conspiracy to defraud. It’s frankly staggering that the SFO in 2011 did not investigate.” He said the lack of a specific offence of fixing the Libor rate should not have put off investigators.
