‘The first thing we do, let’s kill all the lawyers!’ (W Shakespeare)

One of the reasons (one among so many) why the City and the financial services sector has managed to get itself in such a complete moral and ethical mess is due to the contemporary fashion, whether for directors, regulators or civil servants, to call in the lawyers before making even the simplest decision. As a result, the shysters have, in a relatively short time, grown from a fairly ordinary, rather grubby, hum-drum profession, much disliked historically in many quarters, (ever found an attractive lawyer in any of Dickens’ books), into the multi-multi-million pound business they have become, with a finger in every pie, an eye on every deal, and a caveat for every suggestion.

There was a time, when I was at the Fraud Squad, where the prosecution of fraud was a fairly simple operation. The cops had a huge patch in which to hunt (we weren’t too welcome in the City of London, because that was looked after by our City police colleagues.) God knows what they got up to inside the Square Mile because we were never invited to participate, but they always seemed to be able to wear very nice suits! Nevertheless, by and large, they seemed to have a fairly pragmatic working relationship with the City fathers, and whatever transgressions got committed, the City seemed to be able to sort them out for themselves.

We had an office called the Director of Public Prosecutions, a fairly decent bunch of chaps and girls by and large, who looked after our cases. They were used to us and our funny ways, and we knew exactly what sort of evidence they wanted to take cases to court, and we went out to find it. Generally speaking, we treated our clients (nice word for villains), with a degree of consideration, no kicking in of doors in the early hours, but a polite request through their solicitors to ‘come in and have a chat’!

The solicitors, for the most part, tended to be older partners of small firms based in North London or in Soho, most of whom had known their clients for years, had followed them through a wide number of their earlier criminal developments, had briefed ‘well-refreshed’ counsel to appear at their pleas and sentencing hearings, and were genuinely amazed, in so many cases, that their clients were still actively engaged in a life of crime.

We had a nice local Court down at the ‘Bailey’, where the Judges and the Court staff knew us all by name, and where, by and large, most of our old clients would plead guilty to something or other, and dutifully troop off to spend a few months R&R at Ford Open Prison, while their brief, his solicitor and the detectives went across to the Magpie and Stump for a few beers and the pub’s excellent steak and kidney pudding.

The point I’m trying to make is that the system we had all worked so hard to devise, all worked perfectly well.

Fraud wasn’t seen as fashionable, it wasn’t seen as racy and daring, it wasn’t seen as dangerous and it wasn’t seen as something about which anyone really cared very much, one way or another.

Within the space of a few months, Margaret Thatcher ended all that.

The era of the ‘Big Bang’ ushered in an atmosphere of cultural change which remodeled the face of the City of London and its practices for ever. With the breaking up of the monopoly of the Stock Exchange and the admission of foreign shareholders and practitioners, banks and their business models changed completely.

Mrs Thatcher was an interesting dichotomy. She fervently believed that a large swathe of public services could easily be taken out of public sector monopolization, and large elements of their function hived off into private ownership. She believed this would foster competition and lead to greater efficiency and less cost. She included policing among these functions, and saw no bar to large sectors of policing services being privatized, and paid for by the constituent bodies who would use their services.

She saw this could work particularly within the City and the financial sector, and so was born the era of the SROs, the Self-Regulating Organisations, which sprung up like mushrooms after a rain shower.

I was the Fraud and Investigations Director of one such agency, FIMBRA, by far the most egregious of all the agencies, and the one whose constituent members contained the largest bunch of spivs and wideboys. Its initials stood for the Financial Intermediaries and Managers Regulatory Association, but after my time, due to the regularity with which some of its members helped themselves to their client’s investment funds, and then disappeared, it became better referred to as ‘F××k It, My Broker’s Run Away.

At first, the SROs were like an alphabet soup of initials, and they created their own codes of conduct and their own rule-books, but because they were now privately-owned and run by and for the interest of their constituents, they didn’t like the idea of being ‘policed’. They insisted on being regulated, so there was no room for detectives any more, and the lawyers proliferated. They were lawyer-ridden, and no-one could make any decision without involving the learned friends because of the likelihood of civil action flowing from any decision which might have an adverse impact upon any individual practitioner, particularly those whose dishonest activities meant that they stood to lose a lot of money.

The point is that the whole era became run by the lawyers, and out of this whole lawyer-driven culture grew a public-sector response to fraud and financial crime which taught that without lawyers running every element of the process, nothing could be properly achieved.

So, in a very short time the investigation and prosecution of fraud was taken over by government lawyers through their new playgroup called the Serious Fraud Office. Their legal colleagues in the financial sector, who hitherto wouldn’t touch fraud cases with two barge poles for fear of being tainted by their association with the criminal fraternity, now all suddenly piled in to develop ‘financial crime practices’ as more and more it was believed that their traditional commercial clients would come under the spotlight. These lawyers rubbed their hands with glee at the thought of the cornucopia of fees which would cascade from their clients’ pockets if they were charged with city frauds, and set out their shingles offering fraud defence practices.

The lawyers lost no time adopting all their usual time-wasting and process-delaying tactics; indictments grew longer and longer; documentary evidence became measured not by lever-arch files, but by the room-full; cases dragged on and on, jurors were subjected to cruel and unusual punishments by being required to submit themselves to months of dubious legal tactics, and all the while, the bills and the fees grew bigger and bigger, and the lawyers got fatter and fatter. It got so incestuous that conferences with cocktail parties were held where lawyers from the SFO and the regulators rubbed shoulders with their colleagues from the City law firms, and everyone had a wonderful time getting richer and richer, because by now the public purse was being invoked, and even the fattest cats were being granted legal aid.

Within a couple of years, the entire fraud case sector had ground to a halt in terms of investigations being completed, cases coming to trial, trials being expedited, hearings being shortened, convictions being obtained. With a few exceptions, none of this occurred, and the whole ghastly mess eventually began to subside into a morass of petty squabbles, and the shrinking of the reputation of the SFO, as more and more cases were either dropped, abandoned or the defendants were finally acquitted.

Unsuitable cases were pursued, Chief Officers of police would lay-off even the most meaningless fraud cases on the SFO because it would otherwise mean eating into the decreasing policing budgets; morale at the SFO plummeted, and fraud statistics grew exponentially, and all the while, the financial practitioners plundered the treasury.

So, now, when we have finally woken up to the dreadful realization that the last 10 years of city and financial regulation has been nothing but a bad dream, that the fat cat bankers with their swollen pension funds have stolen every last asset worth nicking and there is a desperate need to rebuild a regime which will begin to take the fight back to the looters, what do we get offered?

Headlines that read ‘Top lawyers back call for single regulator to tackle city fraud’.

‘…There are suggestions by former senior lawyers that the role of the SFO should be merged with the FSA...’

Oh God, yet another amalgamation of civil servants, even more ‘jobs for the people-like-us’, an increase in the ‘safe-pair-of-hands’ mentality which will do nothing to make any difference to the conviction rate.

How can I tell? It’s very simple, even dear old Monty Raphael from Peters and Peters, the doyen of the fraud defence magic circle, is reported to be calling for even more changes in the prosecution policy regime.

Monty and his close mates have made a very good living from defending fraudsters from within the extant regime and now he is demanding an end to ‘…Balkanisation’ and the development of a coherent anti-fraud prosecution strategy that is intelligently resourced, intelligently focused and proves a real deterrent to fraudsters…’

When the fox starts demanding that the farmer increase the quality of the fences to prevent his hens escaping, it is a sign that even the fox is getting fed up with eating chicken!

What a future conservative government needs to do is to focus on re-energising the one single agency which will have the will to go after criminal fraudsters, the criminally reckless fat cats and the pension looters and that is through a properly funded, trained, motivated and resourced detective force, and not one that comes from within the Square Mile, because they are too close to the City fathers.

We need a dynamic department based at New Scotland Yard, staffed with cynical career detectives who can most closely resemble Oliver Cromwell’s ‘…russet-coated captain, with fire in his belly, that knows what he fights for and loves what he knows…’

Such men and women are needed now more than ever, because it is detective skills, cunning and courage that we need, not lawyer’s slippery words and dubious judgment calls. We need someone to take the fight to the enemy, hard detectives who will not be frightened to make some difficult decisions, secure in the knowledge that if they act in good faith, the Commissioner will support them.

We need, what my old friend Detective Chief Inspector Cliff Knuckey used to call, ‘…the heady aroma of splintered wood first thing in the morning…’ and we need a constituency of dishonest bankers, financial advisers and money jugglers to lie awake in the early hours wondering if the sounds outside the house are a precursor to the Fraud Squad making an unannounced visit!

The last thing we need, right now, is any more bloody lawyers, and we have to take Shakespeare’s words metaphorically to heart! Let the lawyers stay on their side of the court where they belong and let’s get back to dealing with criminals in the way which works best. If George Osborne can achieve this, then he will have put the pieces of the equation back where they rightly belong, where the cops catch the bad guys, and the shysters defend them, and we can all get back down to the Old Bailey again.

Maybe the Magpie and Stump might be prevailed on to put steak and kidney pudding back on the menu!

This greedy bastard must not be allowed to profit from his ineptitude

The news tonight that ‘Fred the Shred’ Goodwin, the disgraced former CEO of Royal Bank of Scotland, is already receiving a £650,000 per year pension, which will continue for the rest of his life, is the final kick in the balls for the British tax payers who are now having to bale out this ridiculous man’s greed, arrogance and managerial incompetence.

If the remaining private sector directors of Royal Bank of Scotland do not give immediate undertakings that they will commence emergency proceedings against him for breach of his fiduciary responsibilities towards the bank and its shareholders; take proceedings to freeze this pension fund in the interim period, and then take the most aggressive legal action against Goodwin to claw back this immense pension fund, they should be sacked by Alastair Darling tomorrow, and a criminal investigation task-force formed by the SFO to begin investigations against Goodwin for alleged criminal recklessness in his management of RBS.

This appalling man must not be permitted to profit from his breathless ineptitude.

How short City memories prove to be!

Financial sector apologist starts wingeing at David Cameron.

Late last year, David Cameron went on the record and questioned why the people who had contributed to so fatally undermining the financial credibility of the City, should not face prosecution for criminal offences.

It was a very brave statement for the leader of the Tory party to make, but it demonstrated how sincere the new leaders of the Conservative party are in determining that when they are in charge, this situation will change.

It has long been a tradition within the financial sector that no sooner does a public official make a statement which runs counter to the continued interests of the financial sector’s adherence to the status-quo, then some member of the financial establishment can be dredged up to pour cold water on the censure, and to make an appeal to higher loyalties for every interested person to adopt a single policy line opposing the proposals.

Thus it is with David Cameron’s observations on City wrongdoing and his very strident attacks on City bonuses.

As reported in yesterday’s Evening Standard, Mr Cameron has been apparently challenged by someone called Hugh Osmond, described as the ‘Pizza Express entrepreneur’, who claims to be dismayed by the Conservative leader’s behaviour during the economic crisis.

Apparently, the Pizza slinger’s ire has been aroused by David Cameron’s response because he doesn’t think it ‘…shows a real attempt to understand either the genesis of the crisis or how to fix it…’

So, for Mr Osmond’s benefit I will tell him the answer that apparently only he doesn’t know. The crisis was caused by greed, mate, pure and simple greed!

It seems a little strange that this explanation has to be made to a man who as recently as 2008 was so mean he only paid his staff the minimum wage, and then charged them an 8% surcharge for reimbursing them for any tip paid to them on a credit card! He will tell us he was obliged to do this by law, but it didn’t stop a strike at his Wimbledon branch, part of a wider campaign to demand that all restaurants distribute service charges and restaurant tips fairly after a member of staff was sacked for speaking out against the 8% levy.

Mr Osmond clearly believes he has a right to dictate policy to David Cameron, because last year he gave £84,000 to the Tory Party. That’s roughly the sum of money equivalent to the 8% surcharge paid by 350 customers per restaurant, throughout the entire year, or 1 customer a day, give or take, so it may well be thought that some of that contribution is coming straight out of the sweat of his employees, to say nothing of their pockets!

Mr Osmond has highlighted David Cameron’s attack on the greed culture as an example of ‘…populism taking precedence over proper understanding…’ Clearly not a popular move with Mr Osmond, but he has a weird way of determining what the proper understanding is, by likening it to another area of financial payments equally highlighted for their strident greed, their lack of any logic and their complete absence of value.

He states; ‘…Banker’s bonuses are like Premiership footballer’s wages…’

As if this staggering insight was not enough he continues;

‘…You can have a view that they incentivize the wrong sort of behavior…’

Yeah, well right so far pal,

‘…but they’re not at the root of the issue…’

Well help me understand this better Mr Osmond, just what is at the root of the issue? We pay footballers far too much for doing very little, and we pay bankers the same, what is it about that equation you find difficult to understand!

The real point is that Mr Osmond is entirely irrelevant as far as this discussion is concerned. His remarks, and other’s comments must be put in context. Today’s FT reports;

‘…The devastating critique by Mr Osmond, who donated £84,000 to the party last year, represents the first public backlash by Tory supporters against Mr Cameron’s handling of the downturn.

But it reflects much wider unease in business about the substance and tenor of Tory attempts to wrest political advantage from the crisis. Another prominent Tory supporter said the party leader was getting sucked into a “ridiculous” Westminster game of “banker ¬bashing”.

The Tories’ many allies in the City say they understand the political rationale for the party’s attempt to outflank Gordon Brown on bonuses. But there is alarm about the potential consequences. One Tory City figure warned that Mr Cameron could be creating problems for an incoming Conservative government, not least by offering tacit support for potential over-regulation…’

This is all bollocks and should (and will be) ignored by David Cameron and George Osborne.

There is no question that the new policies are ‘banker bashing’ or trying to outflank Gordon Brown on bonuses. Brown has already painted himself into a corner as a serial ditherer on how to handle the bonus issue.

The complaint of over-regulation is the perennial whinge of the City fat cat and should be treated with the contempt it deserves. It will get louder and louder for a while, but it must be ignored resolutely. Eventually it will die out as these dinosaurs who don’t realize that a whole new regime of financial regulation will be needed in the future under a new Tory Government, will, if ignored, become extinct as a result of their failure to adapt to changing circumstances.

That goes for Pizza slingers as well!

The Psychology of the Fraudster

If you find yourself wondering how so many people could invest with Bernie Madoff or how others could so successfully gull apparently sensible individuals into believing their stories, read on.


Towards an Understanding of the Manipulative Personality


“If you owe the bank £1,000, they can make your life a misery. If you owe the bank £10 million, then you own the bank.”

I was first taught this lesson in immoral philosophy, when I began my posting to the Fraud Squad at New Scotland Yard. My mentor, an elderly ‘mittel european’ refugee and ‘businessman’, who had spent his mature years, either selling insurance and other forms of investment opportunities, or borrowing money from a series of banks and individuals, cross-firing it through a wide variety of accounts, and then, mysteriously, forgetting to pay it back, tried, gently, to teach me the gospel of eternal greed.

He was, he would assert vigorously, not a crook!

Far from it! He was merely the conduit through which a large number of very greedy individuals (in which group he included bank officials), realised a false hope of enrichment. The fact that they would, and could, never achieve their ambitions, was immaterial. He was the provider of the avenue of golden opportunity, through which this constant parade of ‘schmucks’ could try and reach their own personal nirvana, a land of limitless opportunity, restricted only by the limitations on their own credulous expectancy!

He was a professional con-man, and over a period of months, he taught me that virtually all victims of fraudsters have only themselves to blame. At first, I was shocked. Did he not perhaps retain a certain degree of sympathy for the old, the infirm and the weak-minded?

The latter, the truly feeble-minded and those whom he considered to be incapable of formulating a true understanding of the offer being made to them, he exempted! They were not true ‘marks’ in any event, because their mental state meant that they could not be said to be able to enter into the proposed arrangement with the requisite degree of volition, which, he preached, was a very necessary state, if the ‘big con’ was to be successful.

This lack of the requisite mental state immediately predicated against their being considered as true ‘sucker’ material because he could not accurately predict their behaviour, and therefore this made them very dangerous from his point of view. I came, slowly, to realise that he was not exempting them from any sense of concern for their condition or for sympathy for their weakness, but because they posed an unacceptable threat to him, and it was the existence of the threat, whose implications he was powerless to control or influence, that made him eschew this particular group.

This was a man who always played the percentages, and he had worked out long ago that when dealing with the real nutters, and the feeble-minded, the odds were stacked against him!

As my career in the Fraud Squad, and later, as a financial regulator and legal practitioner developed, I came to realise the truth of the old man’s message. He was not unique. He was a member of a class of men and women with a particular mind-set, a group of individuals whose view on life had become distorted, in some cases mildly, and in some, to an exaggerated degree. They are all, without exception, victims themselves in some form or another, (he had spent years in a concentration camp) and conducting their affairs in a deceitful way provided them with a means of striking back at the perceived injustices of which they consider they have been made victim!

Such people all conduct their affairs according to the creed which my first teacher explained to me. He divided them into three groups. In some cases, like him, they do it merely to make a great deal of money. These are the practitioners at the very apogee of their craft. They recognise their motivations, and they use them ruthlessly to acquire huge wealth. They have no interest in any other form of reward, and like as much as possible, to remain as anonymous as possible.

In many cases however, other individuals use their twisted talents first to acquire power, which they then use to acquire financial rewards. These are the most dangerous, because they are really in denial as to their own true state of mind, and are using their talents as much to deceive themselves as their victims. Nevertheless, they will use the same disciplined tactics as their more directly entrepreneurial colleagues.

Finally, there is a small, but nevertheless identifiable group who suffer from a clinically-identifiable illness. In polite company it is referred to as ‘Munchausen Syndrome’, but in more common parlance, the condition is known as being a pathological liar! Such people are sad individuals who are simply incapable of determining the difference between truth and lies, and cannot see that their deceits and distortions render them wholly unbelievable. They also fail to understand that others, with whom they have to conduct normal relationships, quickly learn to distrust them, and guard themselves against the impact that such dangerous individuals can impose.

All these groups operate on the recognition of a carefully orchestrated combination of conditions. As my old con-man taught me, the potential victim has to demonstrate three important features in order to be successfully gulled, and they have to be identified in the correct order.

The critical triumvirate are greed, ignorance and fear, and they have to be present at the right time in the process of the relationship, for the successful con to work.

Once they have been identified, it did not matter in which environment the con was being played, it would be achieved successfully. Thus it is that the true con-artist can operate with impunity in any market or climate where a financial motivation is an important criteria of the perceived success or achievement of the victim.

Greed, he opined, was the crucial emotion. Greed enabled the victim to overcome his natural state of caution, and encouraged him to exercise the important ‘willing suspension of disbelief’. This was vital, because it was the crucial predicator which rendered the victim capable of moving from the status of potential victim to that of qualified ‘mark’. The reason such a move was necessary was because once the greed emotion had been aroused, it was important for the ‘mark’ to want to move to the next stage, and that desire had to be a voluntary one.

This was where the second component came into play. Ignorance on the part of the ‘mark’ had to be maintained and encouraged. It was during this stage that the critical degree of greed-enhancement had to be supported, because it was during this period that the ‘mark’s’ psychological dependence on the need to continue to believe the fraudster, was enhanced and cemented. If he was offering an investment scheme, he would always insist that the potential victim invest far more than he could afford. If it was in his work environment, he would always commit to deliver a far higher degree of profitable sales than any other salesman.

‘The schmucks’ he would tell me, ‘are always on the look-out for something for nothing. If you only offer a punter an investment he can just afford, you aren’t playing to his greed motive, and he might consider backing out. Always get him to commit far more than you know he can afford. He will beg, borrow or steal the cash to get into the game. Once he’s hooked, you’ve got his money anyway, so what do you care? The more he’s committed, the less likely he is to want to expose you’.

‘If he’s a sales manager, then your commitment to achieve a huge sales target plays to his greed factor just the same. He needs to make his targets to get his bonus, and he wants his bosses to think he’s a go-getter. So regard him like the ‘schlemiel’ he is and treat him like a mushroom. If he asks how you’re going to achieve it, just think of him like a punter, stay schtum, and give them any load of old patter, but never give them any facts’, that way you can never be held accountable. When, later, you haven’t reached the targets you promised, he will be so frightened that his own bonuses won’t be paid that he will make any excuse he can for your shortfall. He will go into bat for you, he will even fiddle the figures to make it look like his team achieved their huge targets.’

Ignorance of the true facts therefore was a critical component, and it was at this stage that the greatest danger to the con-artist was present, because if the level of ignorance could not be maintained, then the greed factor might be undermined, and this could lead to an unravelling of the entire scheme, with potential problems for the scammer.

So, the necessary degree of ignorance was maintained by a number of tactics. The choice of victim was an important criterion. ‘Always con your friends, family or work-colleagues first’, the old man used to insist. ‘They are much more likely to believe you and far less inclined to shop you, when it goes wrong’. The ignorance factor could always be enhanced by making the victim believe that even if the opportunity sounded too good to be true, it could not possibly be unachievable because the con man was considered to be such a close friend or a trusted work colleague. ‘A good con-man, he once told me, ‘doesn’t have to go looking for his victim. In most cases, with the right story, they will come to him!’ The more socially elevated a group they are, if your story means they can achieve something which is important to their egos, they will lap it up like kittens and milk.

Ignorance could also be enhanced by providing a minimalist amount of information about the investment scheme, the business plan, or the market opportunity. On the other hand, it could be achieved by the provision of a huge volume of detailed reportage, designed to create an overload of facts. On balance, this method was usually preferred, because it gave the impression of crucial knowledge and technical expertise, a state designed to alleviate potential disbelief.

As my old mentor explained, most potential victims were too scared to demonstrate their own state of pitiful ignorance, for fear of appearing to be less qualified than they might want to be considered. Quite often, a neat variation on the con-man’s methodology is to appear to defer to the potential victim, implying that the ‘mark’ is a person of considerable experience in the area within which the scam is to operate. ‘...Let the mark do the work for you. Let him think he understands the proposal, then his ego will lead him on...’ This is done, particularly within the workplace environment, where a senior manager is being bamboozled, in order to encourage him, as the potential ‘mark’, to believe that the proposal is one in which he is expected to display competence and core knowledge. This is where the fear factor, the third, and perhaps most vital component, comes into play.

‘Fear’ my immorality tutor explained, ‘is the most powerful influence in completing the big con. When you see the fear in their eyes, then you know you’re home and dry. You can laugh all the way to the bank, because they are never going to admit what has happened’.

At first, I did not believe him. ‘Surely’, I queried, ‘once a victim knows what has happened, he will want redress, he will seek revenge and retribution’.

‘Very, very rarely’, came the experienced reply. ‘Look at it like this. Virtually all victims of the big con are stupid, gullible, and at heart, fundamentally dishonest themselves. That is why a scheme that has all the hallmarks of overt dishonesty or even mild criminality is far more likely to succeed, than plain vanilla offerings. When they find out they’ve been conned, what man or woman in their right mind is going to later admit publicly that they were willing to part with their money in a scam which they were told was probably dishonest, and certainly immoral’?

‘What business manager is going to admit to over-promoting a man who has successfully shot him a line about his ability to deliver profitable returns? If he makes this admission, his own bosses will start to doubt his management judgements, and query his decision to promote the man in the first place, and if the bosses’ own financial rewards are threatened by his failure, then they will line up to support him as well. The best situation for the scammer is if he has the slightest chance of taking those above him down with him if he falls, because then he will be wholly protected. All concerned will close ranks to protect the con-man, sooner than expose him and then put themselves in the firing line for their own incompetence. In reality, they will almost certainly promote him, in the hope that he will become someone else’s problem’!

Fear was crucially important, he explained, because its existence was the vitally necessary degree of protection that meant that the scam merchant could guarantee he would not be exposed. Most victims ultimately came to realise that the scheme they had adopted was utterly risible, totally ridiculous and utterly laughable and that they had been conned, but then were incapable of doing anything about it. Indeed, the quicker they came to the unmistakable conclusion that they had been fooled, the better, because then the con-man could move on to the next ‘mark’, knowing he was safe from investigation.

The true expert, he said, was the con man who having successfully gulled a victim the first time, could go back and gull him again. While not an every-day occurrence, he had achieved it many times himself, using a variation on the greed and fear link, by playing on the victim’s willingness to accept that the second time around, things might get better, and that the business opportunity might just pay off. Like the inveterate gambler, the victim becomes the cause of his own downfall, and continues to try to beat the odds, sooner than admit he has been completely fooled.

This method, in his opinion, worked best in the working environment, when management could be more easily encouraged to believe that apparent failures to deliver on commitments could be explained by external circumstances such as a change in management in a client company, a purchasing policy shift, or the removal of a key business facilitator.

Most importantly of all in the work environment, if the con artist had the ability to promote others in his own immediate team to more senior positions, or to arrange for their internal reward, then this state of affairs could be allowed to continue almost indefinitely. Someone with real ability who would not fall in with the ethic of the group and who pointed out that internal policies were wrong or damaging, had to be got rid of as quickly as possible and ridiculed or smeared to make them seem foolish or worse, disaffected. Perception of others’ ability is always more important than real proof of competence. ‘People who can’, generally do, and are usually always overlooked or marginalised. People who talk about doing, generally get more attention. As long as the con-man can keep persuading others that he and his team are hugely effective, regardless of the truth, then more and more non-connected individuals would, when observing the almost inexorable rise of his direct reports, assume that they must be doing something special, if only to justify the realisation of their promotion or recognition...

Eventually, I had to give up on him. No-one wanted to give evidence against him, in fact, there were very rarely any complainants, despite the large number of people I suspected he had scammed. He died a very rich man.

When I heard he was ill and in hospital, I went to see him. I have to admit that I had become very fond of the old rogue, as his refreshing openness about himself and his incorrigible ways was almost addictive. Sitting by his bed, I asked him;

‘Is there anyone you couldn’t con’?

He smiled, and patting my arm he said;

‘Of course there is, you can’t con an honest man!’

But then he smiled even wider and said;

‘Mind you, there aren’t too many of them around!’

The FSA admits – We regulate banks by ticking boxes

Well, alright, maybe that wasn’t exactly what FSA Boss, Adair Turner said on the Andrew Marr Show this morning, but he might just as well have done.

What he did say was that in their regulatory methodology that perhaps they had been ‘…too focused on process and procedures, and not on the totality of the systemic risk…’

In that one telling phrase, Turner finally admitted what some of us have been telling the FSA and the financial regulatory community for so long!

I was watching Chancellor of the Exchequer, Alistair Darling on the news this week, and no matter how often he was asked if he would be nationalizing HBOS, he squirmed and wriggled his way out of giving a straight answer by saying that banks did better in the private sector as long as they were well regulated. It wasn’t the answer to the question he was being asked, but it was clearly the mantra his political advisers had given him, and he stuck to it.

I suppose I wouldn’t mind so much if I had half an ounce of confidence that the two-tone Caledonian had half an ounce of knowledge of what this shibboleth, ‘regulated’, meant, but the problem is, I don’t!

When it comes to regulating the financial sector, Darling and his boss, Gordon Brown, seem to have bought the ‘good chaps’ syndrome in an even more wholesale way than Tony Blair used to adopt. They turn, without fail to the City institutions, the big consultancies, the business lobbyists, the ‘great and the good’, all of whom have a vested interest in being nice to the financial sector, and in doing so, they reflect, again and again, their wholesale lack of real understanding of what is needed to regulate the City (which I am using as a general catch-all phrase for the financial sector).

Let us start from the first premise which is known to anyone who has seen the financial sector from the inside, or from underneath. The City is a jungle, in which the law of the jungle prevails, and the strong survive and the weak go to the wall. It is a place where the only rules are ‘don’t get caught’ and if you do get caught, ‘you’re on your own’. Nobody goes to work in the City for the sake of altruism, you go there to make a shed load of money, and as much of it as you can before you retire with your grotesque pension, your summer house in Tuscany, your non-executive seats on various plush boards secured, and possibly a knighthood or even, under this mob, a peerage.

There used to be a time when certain Chancellors used to say that international businessmen came to London to do business because it was known as a clean and well-regulated place in which to do business.

What utter bollocks!

These men come to London because they know that it is flabbily regulated, that not too many searching questions are asked and that it has been traditionally easy for a wealthy foreigner to set up business in London, secure in the knowledge that he will be offered great tax incentives as a non-dom to stay here, and that is why foreigners poured into London, because it was a tax-haven for them, it had nothing to do with London’s well-regulated markets.
People can’t make money in markets that are too well regulated, so you roll the dice, you play for high stakes, you keep your winnings and you try to fob your potential losses off into other people’s investment plans and pension policies. Like the man from Citibank said, ‘when the music plays, you have to get up and dance!’

Oh, and when it comes to the regulator, you first of all make sure that when their staff show any sign at all of becoming remotely good at what they do, and they have begun to ask questions which might mean that they might just have an inkling of what you are up to, you make sure that you hire them with more money than they will ever earn in the agency, and you put them to run your own internal compliance organization. Once you have them signed up, they have a choice, follow the party line and enjoy life, or rock the boat, and find themselves in deep water!

The problem, for too long, has been that the FSA has repeatedly failed to regulate the financial sector. Oh, they have given a good impression of going through the motions, they have had review procedures, think-tanks, consultative documents, and discussion forums. They have produced reams of paper containing millions of words of policy, all the time making sure that each document contains the words ‘this is not FSA advice’. They have ticked the boxes, focusing as Adair Turner has admitted on ‘…process and procedures and not on the totality of systemic risk…’

I have some advice for Lord Turner, presumptious though he may think it.

Ticking boxes of processes and procedures doesn’t cut it, mate! You also need some grey hairs, a good memory for what happened before, some real personal moral courage to step in and say ‘enough is enough and this has got to stop’, and the skill and knowledge to be able to know when the great white sharks are not just rolling in the surf, but are in the middle of a feeding frenzy. You can usually tell by the presence of the blood in the water, never theirs, always someone else’s.

So, start hiring some people who really know about financial wrong-doing and give them some space in which to manoeuvre. If you don’t know any, give me a call and I can recommend some.

The air just goes on smelling sweeter!

The resignation of Sir James Crosby following the whistleblowing revelations of Paul Moore, HBOS’ Head of Risk, highlights a major problem inside the culture of British financial services in the last 10 years.

Crosby’s arrogance would, at one time, have been thought incredible, but these days, we have come to learn that his, and other’s overweening egos are what have driven the banking gadarene rush to destruction.

Here was a man who had already been alerted (if we believe the FSA, and although I find it hard to credit, no doubt they have some documentation to back up their claim), alerted to the recognition by the FSA that they were concerned about the risk posture of his institution. He was then told by his Head of Risk (who up until that moment had presumably been doing a perfectly acceptable job) that the bank was ‘…growing too fast; had a cultural indisposition to challenge, and was a serious risk to financial stability and consumer protection…’

It is that phrase ‘cultural indisposition to challenge’ which so marks out the reason for the board actions and the office atmosphere of the workplace which these men ran like petty fiefdoms. What they demanded, they got, and no-one had the bottle to challenge them. They were nothing more than tin-pot bullies swaggering around their little empires, all of them playing mind games with their competitors, and treating their staff like serfs.

Faced with these two important warning, what did Crosby do? He ignored the regulator and sacked his Head of Risk.

Like you do!

He ignored the regulator because he knew he could afford to. In the culture of ‘light touch regulation’ they had passed on their warning, which would have been couched in a series of meticulously-minuted memos, and in the fullest use of the kind of English language we have learned to expect from the new ‘Office of Circumlocution’ . Crosby had every reason to suppose that this warning was nothing more than just a dice-roll, and that at any moment, the odds would come right in his favour, and he would be seen to be a Master of the Universe, while the FSA memo, in true regulatory fashion, would be kept confidential and never see the light of day again. As far as the warning from his Head of Risk was concerned, well the simple way to deal with him was to mark him down as a misfit. Despite their high-sounding titles, Heads of Risk, and Heads of Compliance, Money Laundering or Financial Crime, do not rank very far up the food-chain inside a major financial institution, and they are very expendable, if they do not sing the song the CEO wants to hear!

The problem with Crosby and his ilk is that they really do believe that they are immune from the effect of the ordinary ‘slings and arrows’ that the rest of us have to face, and the only ‘outrageous fortunes’ they have had to wrestle with were the ones they were voted in cash bonuses, pension plans and share options. They have come to see themselves as a gilded elite; a small, select and private group of well-tailored ‘uber-mensch’, who are, as one senior banking executive put it to me once while telling me how he and his class would never be prosecuted for money laundering ‘…we are a protected species…’

They have forgotten ‘those base degrees by which they did ascend’ (Shakespeare always finds the right motif), and they have flourished in the febrile atmosphere of a financial market where all the old rules were thrown out of the window , and all the regulations were enforced by a bunch of wimps, who really yearned to be financiers themselves and were only waiting for the recruiter to make that phone call.

In Crosby’s case, he was perceived to have risen so high that he was appointed, by Gordon Brown to the deputy chairmanship of the very regulator itself, in the naïve belief that his kind of mind was needed to continue to maintain the ‘light-touch regulation’ so beloved of New Labour. Brown never understood that just because the fox has a nice suit doesn’t make him any less of a raptor, and putting a man like Crosby, described by the Evening Standard thus; ‘…under his leadership …one of the most audacious banking mergers in history was pulled off, the ultimately doomed £29 billion pairing of Halifax and Bank of Scotland…’ into a senior regulatory position was akin to putting a complete stranglehold on any kind of dynamic regulatory activity for the foreseeable future.

Now this self-fulfilling prophecy has come to pass, and the British banking sector is in such a state which even the worst Banana Republic would think twice about investing in, it is reasonable to ask ourselves what kind of punishment is most suited for people like Crosby, not forgetting Fred the Shred, and the rest of the rogues gallery who trooped into the House of Commons Select Committee to cop a plea to their serial incompetence.

Now Crosby has resigned. He claims there is no substance in the allegations made by Paul Moore, well in my book innocent people don’t resign, they fight their corner, but as Mandy Rice Davis once said, ‘…Well, he would say that, wouldn’t he..!

I believe these men should be made the subject of a class action by the investors and the Government, where they now hold a majority shareholding, in the institutions they have ruined, and they should be sued for breach of their fiduciary duties towards their institutions.

These men have forgotten the basic, common-law responsibilities of directors, and in the exercise of their greed, arrogance and overwhelming egos, they took their eyes off their primary responsibilities. They constantly claim high skills and elevated abilities, so they should be subjected to a higher standard of prudency and probity, and they should be judged accordingly. They should have their pension funds frozen and their personal assets sequestered, their homes seized and their bank accounts controlled by the Asset Recovery team of SOCA, pending the outcomes of the trials.

We must never be allowed to forget these men and the damage they have caused. Their names should join Guy Fawkes on November 5th, and their effigies should be burned on huge bonfires until such time as their memory has been finally expunged. None of their ill-gotten wealth would even go near scratching the surface of what they have dissipated, but it would be a most defining moment!

A terrible beauty is born for RBS

‘As a dog returneth to his vomit, so a fool returneth to his folly’. Proverbs 26:11

The news that Royal Bank of Scotland is still determined to pay out somewhere in the region of hundreds of millions of pounds in bonuses to its staff, is nothing more than yet another red rag to a very weary bull, and must not be allowed to happen.

Don’t these ridiculous people ever learn, don’t they get it? The world of the international banker is never, I repeat never going back to the ludicrous days where men and women with no particularly special qualifications apart from betting millions of pounds of other people’s money on the red or the black number, could demand and receive bonus pay-outs, some running into seven figures.

The British people have been lied to for years by the banking sector that only bankers and their employees truly understand the complex ramifications of the global banking sector, and we must all exercise a willing suspension of disbelief while the banks continue to reward their staff with vast sums of money beyond the dreams of avarice.

But it is just not true, and now they have been finally rumbled. They were driven by what criminologists call ‘the anomie of affluence’, which roughly translated so that even a banker can understand it, means that the more money you are given, so you believe that the ordinary rules of social and commercial intercourse do not apply to you. It also means that like any common drug addict, the more your ego swells, and the more the ordinary rules of engagement are ignored, so you need even more money to sustain the self-belief.

But when they have managed to screw up to such an extent that the ordinary man and woman is called upon to bail them out with public money, then the rules of engagement change, and change utterly, and when that happens, as W.B.Yeats, in his excoriating poem about the Easter Rising observed, ‘…a terrible beauty is born…’

The terrible beauty this time is the cathartic realization that the banks are going to have to finally run themselves as prudent centres of legitimate commercial business, and this must be done not just in the full light of public transparency, but also with public approval and legitimacy. The age of sleaze, greed and conduct amounting to nothing other than corporate corruption and trough swilling at the highest level, is over.

The kind of bonuses which have been paid to bankers in the past must be discarded for ever. These bloody people should be on their knees thanking us, the taxpayers, that they still have a job. Managers should be paid their basic salaries on the basis of how well they provide services which help most efficiently to manage their depositor’s monies, and how much value they can add to their depositor’s commercial interests, in the way of prudent lending for properly assessed commercial enterprises, mortgages for properly valued properties and rewards for customers who want to save money for future realisation. Credit card spending should be drastically policed, and all outstanding balances should be repaid within 3 months, so that extended credit, (one of the predicators of the current crisis) should not be allowed to run wild.

Directors should earn capped salaries, in the same way that President Obama has outlined in the US. CEO’s pay particularly should be capped at a sensible rate. No person in the public sector needs to be paid more than £300,000 a year. They should receive no bonuses of any kind, but they should only be rewarded with a small and limited number of shares (not options), when their institutions can demonstrate real annual returns in the form of distributable revenues. Their first duty should be to their depositors, not their shareholders, because banks are a unique institution, their very existence is determined by the good will of their clients and their money, and all too often, shareholders are being remunerated at the expense of depositors interests.

The taxpayer should simply ignore the squeals of anguish that these recommendations will unleash. Any bonus or enhanced payment is entirely discretionary, and should only be paid on absolute success. The practice of allowing bankers to grab huge slices from profits, while not being effected by the losses is absurd. Continuing to pay bonuses when a bank is losing money is not just bad business, it is positively criminal, it is straightforward theft.

Sorry, what was that, ‘we wouldn’t get the quality of bankers we need to remain competitive if this was the case’?

I don’t believe it and neither does anyone else, because we have seen the god-awful mess the so-called ‘masters of the universe’ have already caused, and if that was done by the best quality bankers around, then we aren’t going to be any worse off, so stick that argument for a start.

‘Some employees have guaranteed bonuses which must be paid, otherwise they will leave and go to work somewhere else’.

Good, let them leave and see if they can find a job elsewhere. As I understand it the streets of the Square Mile are swarming with unemployed bankers looking for desks, and they would fill the emptied chairs very gratefully. If you don’t like the job which you’ve still got, then bugger off and find another.

Sooner or later, the message that the bonus culture is over, once and for all, has got to be got through to these greedy bastards, whose actions have undermined the whole value-spectrum of contemporary life in Britain.

By their actions they have done nothing but inflate the expectations of salaries and other payments beyond the reach of Croesus, and this has spread to a whole range of other businesses, including a few in the public sector.

They have put a false set of values on local education by shopping around for homes near good schools, and then using their inflated incomes to purchase properties in the catchment areas, thus assisting to inflate the price of properties in smaller communities across the country beyond any measure of their real worth.

They have driven the development of a culture of trash, glitz and bling, whereby an entire parasitical business sector, designed to cater to their every whim, has been elevated to a state where its practitioners have become household name celebrities.

In any society where a chef, a hairdresser, a Champagne bar owner, a tailor, a shoe designer or a dressmaker can command more column inches, and become more valued and more rewarded than a nurse, a policeman, a fireman, or, God help us, a High Court Judge, then there is something very wrong and rotten within its national fabric. This state of affairs is directly linked to the greed-driven, bonus culture, and its days are done!

So, Royal Bank of Scotland, pay your bonuses at your own risk, but if you do, then Government should immediately step in, once and for all, and take you entirely into public ownership.

When are you bastards ever going to learn!

Why are so many major recruitment consultants such crap at what they do?

As a freelance consultant who specializes in delivering contracted bespoke, high-level guidance in the areas of financial crime, anti-money laundering, market abuse, broker surveillance, as well as risk management more generally, I always need to develop new clients, as each existing contract expires.

I deliberately choose to work in the short-term contract market, because it fits my business profile most accurately, enabling me to provide my services through my limited company. It also means that I am able to provide the most cost-effective and value-added services to my clients, who are looking for someone willing to accept a short-term project, in order to determine a specific response to an identifiable problem.

Until very recently, my business has run efficiently and my new work has very largely been generated by recommendations from previous clients on a ‘word of mouth’ basis.

However, in the past few months, the general downturn in the financial market, coupled with the degree of uncertainty about the future, has meant that many potential clients have resisted engaging in similar short-term contracts, preferring to cut back on many areas of compliance training and remedial identification in order to save money.

This does not mean that work is not available but it has been getting harder and harder to find the right contacts, and sole consultant practitioners like myself have to travel further and wider for projects. This in itself is not a major problem, many hotels will offer very cost-effective deals if a business-like proposal is made to them.

However, what is becoming increasingly difficult to find is a professional source of work-referral or recruitment provider who appear to be capable of giving even a semblance of effective service and support.

In my search for projects, I have trawled the internet, and I have established that there are a wide variety of opportunities and proposals being advertised on the net, but can I get an interview, an introduction, a referral? Well, with one major and important exception, Enigma Executive Search, of Waterloo, London, the overwhelming answer is no!

It is important that I do identify this company and my contact, Fearghal McGoveran who has been helpful and professional, because they deserve the recognition of being so wholly different from the rest, and to be fair to them so that they are not associated with the critical observations made in this blog-piece.

Almost without exception, the rest of the work-hunting follows the following same, depressing pattern.

Having found a job-spec on the web which meets your criteria, you phone the company. You know the telephone extension and the name of the person managing the project, you know its reference number, these are all on the web page. You introduce yourself and ask if they are the named agent. The answer is almost inevitably, ‘no’, the named person is ‘in a meeting; not at his/her desk; out with clients, can I take a message’! There is no point trying to get any information from this person because they will say it’s not their project.

You immediately know there is no point in bothering to leave a number, they will never make the return call, even if they get the message in the first place, and that is debatable! You just have to keep calling until you eventually get lucky. It can take two or three days before the requisite person gets back to their desk.

Having sent in your cv, they will deign to identify the end-client, which may or may not make a significant difference to you. There are some institutions I simply will not work for on the basis that their internal culture is so criminogenic that there is no point wasting your time with them.

If you can prevail upon the consultants to send you the full job-spec, you will find that in many cases, the skills requirements run to pages of detail. One job I applied for, a three-month, temporary hand-holding assignment, mentoring a newly appointed MLRO who knew absolutely nothing about his new role, provided over 5 pages of closely typed, skills requirements.

But now you now have to go through what I have termed the ‘cv handicap hurdles’.

The recruitment consultant (who in most cases sounds about 22 years old) then proceeds to discuss your cv with you, in the light of the skills requirements document. I am convinced that not one of them ever reads the damned thing before they speak to you, because if they did, they would have done some homework to find out some more about you. (Has no-one ever heard of Google?)

One consultant queried my suitability because I did not possess the ACAMs qualification. When I pointed out that it was an exclusively American qualification and of absolutely no relevance to a European market, she admitted she did not know what it meant anyway, it was just that the client had indicated it as a requirement. Asking her if my legal qualifications and my Masters’ degree in criminology might be thought to be evidence of a tad more advanced knowledge, elicited the comment that she felt unhappy about putting me forward because I clearly did not meet the stated requirements.

Some consultants insist you alter your cv to include a series of buzz-words appearing in the job-spec. Others insist that you prune your cv because it is too long. Others want examples of recent projects, while others want no detail, just the bare facts of the roles you have performed.

In the last 3 months, I have made a great number of such applications. In all that time I doubt whether I have even received above half a dozen responses from the consultants concerned once they have received my completed application. Of those I have heard back from, 1 of them resulted in an interview, the mentoring role above.

When I have chased an answer, as I inevitably do, I am met, almost ubiquitously with the phrase ‘…It was felt you were too qualified…!’

One young man who left his company after about 6 months of working took me into his confidence and shared the inner secrets with me. He had formerly been in the army and had joined a City recruitment agency. He left because he was shocked at the poor level of service his industry provided to their clients and he hated the bonus culture that meant that any fool could get a job as long as he ‘ticked all the boxes’. He admitted to me that;

• Recruiters lived in a revolving door environment, were paid little and relied on commissions, and it was a hire and fire culture which prevailed. The job was just a ‘box-ticking’ exercise, and no real need to make too searching an enquiry about a potential client was necessary. You dealt exclusively with the HR Departments of the client companies, and all they required were candidates that fitted their preconceived model.

• The ambition was to get in as many potential clients as possible, and then fit the ‘right’ ones into a special category, and to ignore the rest. This was why they had to get such a large turn-over of interest because the ‘right’ candidates were only a selected few.

• The ‘right’ candidate would fit a very selected profile, including age (this was very much specified despite being illegal), sex (depending on role), qualifications (very selective, even poor MBA’s are worth more than any other qualification including Ph.Ds). Relevant previous banking experience, (vital for any job in the banking world because all new employers want to ensure that all their employees know the unwritten rules of banking, and they don’t want to have to explain why what looks like a thinly-disguised criminal offence is merely sound banking practice. They also benchmark their own practices against the new employees’ former employer, to ensure they are doing nothing more than usual).

• In the compliance role, anyone with former police experience was looked upon with grave disquiet, indeed, he said that many employers positively instructed that former police officers would not be interviewed.

• Consulting firms only wanted other consulting firm applicants, who knew the ‘Big Four’ culture; the time charging imperative; the rolling job-creation mentality and who would fit in to the mould without the need for re-education.

• Finally, he admitted that it was a cardinal rule in his former role that the consultant should not submit anyone for interview who was more qualified than the client, on the basis that the candidate would pose a threat to the client in his company and should therefore not be considered for interview.

So, there it is. When the majority of companies in the recruitment industry become little more than an institutionalized self-fulfilling prophecy, it is not difficult to see how, in recent years, those recruited to the financial services industry have meant that it has become a ‘clone culture’, and how the recruitment agencies have joined the Big 4 Consultancies, along with the major law firms and the accounting giants, in becoming willing supporters of the culture of greed which has been perpetrated by the major banks, to the detriment of us all!

Putting the US criticism of the SFO into perspective

Today’s Sunday Times has published a scathing indictment of the Serious Fraud Office. No doubt, much of its content is true. The SFO is no different in its cultural make-up from any other UK agency of financial crime control, the ‘Good Chaps Syndrome’ has always been of paramount importance to civil servants, regardless of whether they could do the job for which they were hired or not!

However, there is another side to the story. Ms de Grazia was granted open season on the SFO when the Government wanted to find reasons for justifying getting rid of Rob Wardle, its Director, after the Saudi Arms corruption debacle. Her report gave them that justification, a bit like a self-fulfilling prophecy. The following article was published by me in ‘The Company Lawyer’ in 2008.

A recent report published by former senior New York City prosecutor Jessica de Grazia, has been variously described as a source of major criticism of the UK’s Serious Fraud Office (SFO). The Office has been generally criticized for its

‘…low conviction rates, its lack of focus of its investigations and the employment of lawyers who lack the necessary skills to increase their convictions rates…’

The report is a highly critical examination of the SFO, and many of the observations made would be indeed a serious indictment of the Office and its culture, but for the fact that the author of the report betrays a lack of understanding of the significant differences which exist between the law enforcement process in England and Wales, and that which pertains in the USA.

Ms de Grazia writes her report, perhaps not surprisingly, from the point of view of a New York prosecutor, but without factoring in the features which, though apparently small, and to the uninformed outsider, possibly insignificant, make such a difference to the way in which crime, and in particular, serious fraud, is prosecuted in this country.

She talks very firmly about ‘skills shortages’ in prosecutors’ offices. She states;

‘…This skills shortage is a by-product of the “immaturity” of the independent prosecution agencies…’

The concept of an ‘independent prosecuting agency’ is a very new element in English criminal jurisprudence. In the UK, it has always been, and still is, the tradition that prosecutors are very largely called from among the ordinary ranks of the men and women who make up the English Criminal Bar.

The US prosecutor’s office however has been traditionally staffed by men and women of very different class and social background. For a poor boy from the ‘wrong side of the tracks’ who had nevertheless done well in Law School, despite having to work his way through college, a period spent in the local prosecutor’s office was a very good grounding for a successful career move. Coupled with the fact that in America, crime and crime prosecution possessed significant political ramifications, an aggressive prosecutor who was seen to be good at ‘getting his man’, and who kept up his conviction rate, was a man who would later rise in the political hierarchy and could achieve high office of State. (Rudolph Giuliani is a classic example).

Much of what Ms de Grazia advocates about the role of prosecutors would not be acceptable to the English legal profession. In the US, prosecutors have very hands-on relationships with major witnesses, coaching them on their evidence and engaging with them for lengthy pre-evidentiary discussions. An independent English barrister would find that kind of relationship with a witness far too close for professional comfort.

In addition, the USA has very draconian sentencing powers contained within both their Federal and State Sentencing Guidelines. These predicate the fact that a very large percentage of defendants will plead guilty to selected charges at a pre-trial, plea-negotiation session, where the prosecutor makes a ‘proffer’ of the sort of sentence they might be willing to ask for if the defendant waives his rights to a full trial by jury and enters a negotiated plea at an early stage. In view of the fact that many defendants are facing the likelihood of serving significant periods of imprisonment if they ‘roll the dice’ and go for a full jury trial, at which they are convicted, many defendants seek the line of least resistance and ‘plea down’ their indictments.

Nevertheless, Ms de Grazia does identify some serious and proper criticisms of the SFO culture. She observes that the relationship between lawyers and police detectives is poor and could do with significant improvement. This is not a new identification and could be said to have bedeviled the working relationships between lawyers and investigators from the first days of the agency. She talks about the absence of constraints upon defence practitioners to shorten preparation times and to agree pre-trial, significant bundles of documents which could be dispensed with in court, and which lead to unwieldy trials and lengthy and complex pre-trial arguments.

There are significant differences between the US agencies and the SFO in dealing with complex and serious fraud trials. However, until such time as the English legal system is willing to contemplate a root and branch reform of the way in which it views criminal fraud (because at the moment it is largely ignored by most policing agencies around the country); provides the necessary degree of professionalism and money to meet its challenges and recruits staff with the relevant degree of skill and knowledge to cope with the issues identified by professional fraudsters; and is willing to consider introducing some form of pre-trial plea-negotiation process, we shall continue to suffer from the same problems which have so be-devilled us in the past.

This is going to mean encouraging the Judiciary to be willing to permit professional prosecutors to make similar ‘proffers’ to defendants, before the court procedure commences. As in the US, the Judge should have the right to review the quantum of the ‘proffer’ and to decide whether he thinks it is appropriate for the charges anticipated. As in the US, the Judge should have the right to refuse to accept the ‘proffer’ as being inadequate to meet the mischief alleged and to refer the matter back to the prosecutor for reconsideration. Whatever the outcome of the Attorney General’s consultation on this issue, much will depend however upon the willingness of the Judiciary to accept the principal of plea negotiation in the first place, and therein lies the question!

The report is a catalyst for debate, undoubtedly, but it suffers from too great a degree of one-sidedness and a failure to understand the English prosecutorial approach towards crime in general. It asserts, as articles of US faith, concepts which simply do not exist in English law. In its assertiveness, lies its flaw, but we should not ignore its findings, we must try to see how they could be adapted to an English model.