Only a financial elite that thinks it is above the law could have thought it could get away with rigging a key interest rate for years on end. It is clear that too many bankers think that laws are for the little people. Sadly, they have been encouraged in this belief by the inability of our law enforcement agencies to take a tough approach in fighting white collar crime.
This was shown in the decision last summer by the Serious Fraud Office not to launch a criminal investigation into allegations that a number of major British banks have been rigging Libor - although of course, we welcome their belated change of heart. Labour wants to strengthen the hand of our fraud investigators so that a financial centre the scale of the City has the law enforcement agencies to match.
White collar crime must be taken as seriously as any other crime. If stealing a bottle of water from Lidl during the London riots can land you behind bars, then so should dishonestly conspiring to manipulate an interest rate on a massive scale. If not, it cannot be said that the law applies equally to all.
It is not 'banker bashing' to say so. The UK's reputation as a business destination will suffer if its authorities cannot be relied on to enforce the law. International businesses will think twice about running major operations in the UK if there is a lack of proper oversight.
The Tories have played politics with the Libor scandal from the start. They initially tried to blame Labour for not legislating to make it a crime.
Actually, there is nothing wrong with the existing criminal law. The Fraud Act 2006 makes it perfectly clear that Libor rigging is prosecutable as a criminal offence.
The problem is not with the law, but with the ability and willingness to enforce it. Unlike the Financial Services Authority, which receives hundreds of millions of pounds every year from the financial services industry, the SFO's budget is being slashed by 25% over the course of this parliament to under £30m. No wonder the SFO's first reaction was pass it on.
Although the FSA investigated effectively and levied a fine on Barclays, it does not have the power to bring criminal charges on this. In other words, the Barclays case has so far fallen between two stools.
This happens all too easily with fraud cases in the UK, where the responsibility for tackling white collar crooks is strung out over disparate agencies, meaning no one agency takes charge.
That is why, over the longer term, we should give serious thought to rolling-up our myriad fraud-fighting organisations into a single, powerful economic crime agency.
More pressingly, we need to address three key problems with the UK's approach to financial crime if we are to restore the public's confidence that we are serious: resources, top-quality talent and deterrence. Firstly, resources. The Treasury has just had a £60 million windfall from the Barclays fine, and it is only right that we use some of this money to beef up our enforcement agencies.
The government should consider diverting £10m of that money to enable the SFO to do its job, creating a specialist Banking Crime Unit to investigate and prosecute complex financial crime.
Over the years, limited financial resources at the SFO has led directly to its second biggest problem, a serious shortage of top-quality staff with the expertise to tackle complex cases against deep-pocketed defendants.
The additional funding we are proposing will help the agency attract individuals capable of taking on these cases: legal and financial high flyers who have a calling to public service. The SFO needs to be able to hire the best and the brightest - because those it investigates certainly will.
Our chronically low detection and conviction rates are a meagre deterrent to fraudsters and we must also make the punishment fit the crime. For example, at the moment someone convicted of money laundering faces up to 14 years in prison, whereas fraudsters a maximum of 10 years. This is just not right.
White collar criminals need to know that if they are caught, they will be sent to Wormwood Scrubs like any other criminal and do the time their crime deserves.
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For they are that clever body of men and women who knew the difference between avoiding rigging their expenses and evading rigging their expenses.
Now I feel I can rest assured that politicians are the best people to judge between right and wrong and have no self-interest in using the Libor affair to deflect attention away from the political cesspit.
1: Not only do bankers think the laws are for little people, so do many of the top people in nearly all the political (local and national) and commercial sectors. Even the people who formulate and enforce the laws, rules and ethics, feel those rules don't apply to themselves! They get that impression because it is encouraged and the example is set by their masters and peers! A large proportion of those that get to the top are arrogant, egotistical and risk-takers. Somehow this is viewed as a positive trait. They do because they can, the precedent has been set!
2: I agree the existing laws are generally perfectly adequate for dealing with fraud and misdemeanour's. The problem is generally one of cost and time! Big business can afford the best lawyers and barristers who are experts at delaying proceedings, finding and using loopholes and pushing up the costs! So much so that the prosecutors will often back down before proceedings begin (a factor in this, may also be, who else at a high level is involved)! Major prosecutions need go ahead, using the best legal brains, whatever the cost! Once individuals and/or institutions have been found guilty, make the penalties fit both the size of the individual and/or the institution! If others on the periphery are involved, prosecute them also!
1. prohibitions under s.56;
2. withdrawal of approval under s.63;
3. penalties under s.66;
4. penalties under s.123 (market abuse);
5 penalties under s.129 (market abuse);
6. restitution under s.382;
7. prosecution under s.397 for making misleading statements.
And then there are private prosecutions (under the Fraud Act 2006, Theft Act 1968 etc.).
See the FSA's Enforcement Guide (including Annex 2).
"Every day you see something that you know is wrong and yet you do nothing."
This is the legacy of the Thatcher years that Labour did nothing to combat.
"Winners cheat if they can get away with it, don't be so naive. Greed is good."
White collar crime is one of the perks of tending the machinery that processes the money. Like bacon trimmings are for butcher's dogs. Everyone knows that.
But the greater crime is the cynicism of the politicians. All playing the game of red v blue like footballers do. Faking injury. Diving. Sneaking a smack in the mouth and a poke in the groin when the ref's not looking. Looking at every situation for an angle that will score a little bit of advantage for your side and discomfort for the other.
It's a disease that has spread everywhere.
"Every day you see something that you know is wrong and yet you do nothing."
Get some integrity. I realise I might as well suggest to my cat that he should write a book, or perhaps try and persuade the scorpion not to sting the frog.
But the Labour Party? You're part of the problem, not part of the solution.
The money they have made is mind blowing and all the bonuses etc. have been built on short termism and gambling on derivatives and other financial products to the detriment of the vast majority of working people who should wake up and demand the SFO sort this out.
Do hope the USA regulators now bring in the FBI as the Banks really do need a good clean out along with all their friends in the top echelons of politics and elsewhere.