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SFO will have to repair its authority after Olympus

Outlook

James Moore
Wednesday 11 November 2015 02:11 GMT
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Michael Woodford talking to Japanese media in 2011
Michael Woodford talking to Japanese media in 2011 (AP)

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The successful prosecution of Tom Hayes over the Libor-fixing scandal gave the Serious Fraud Office a spring in its step.

Here was a difficult and complex case, that many doubted the SFO would successfully see through. And yet it won, giving tough-talking boss David Green a weapon with which to fight a legion of critics.

Now they’re back in the ascendancy. The accounting scandal at camera maker Olympus, unearthed by its British-born former boss Michael Woodford, sparked enforcement actions in Japan, the US and the UK. Care to guess in which of those three the authorities fell flat on their faces?

That’s right. It was the UK, where no evidence was ultimately offered, bringing proceedings against Olympus to a close after months of legal argument. The SFO is now facing questions once again.

Now Mr Green is in need of another big win, whether from the SFO’s investigations into the foreign exchange trading scandal or Tesco’s accounting. Accepting plea bargains was a sensible step on his part, that could lead to easier, and cheaper, victories. But miscreants aren’t going to engage with the SFO if they aren’t genuinely nervous about their prospects if they decide to fight.

The failure over Olympus is a serious setback in that regard.

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