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10 Aug 2015

Andrew Smith’s comments regarding compliance in the light of the recent Tom Hayes verdict published in Thomson Reuters Accelus

Compliance can have influence on post-Hayes prosecution decisions, say lawyers

by Alex Davidson 

Compliance departments, if soon worried into focusing harder on bank trading after Tom Hayes was sentenced to 14 years for Libor manipulation, may have impact on prosecution decisions, lawyers said. There are some views that this could ultimately work for as well as against errant traders. A senior lawyer at Clifford Chance argued that the injection of a trading floor mentality into compliance could lead to a more uniform culture in firms which prosecutors cannot ignore, and which makes it harder for regulators to single out individuals.

Other lawyers were less sanguine about outcomes in some circumstances, in a climate where the Group of 30 has applauded staff rotation between control functions and business in its new report Banking Conduct and Culture: A Call for Sustained and Comprehensive Reform, published just before the Hayes verdict.

“If greater staff rotation means that traders are encouraged to adopt a more compliance-oriented approach to their work, that will logically reduce the chances of a trader being able successfully to rely on a defence which involves claiming they were acting no differently to anyone else within their firm. Put another way, the prosecution would find it easier to portray such a trader as a dishonest ‘bad apple’ who deliberately ignored the culture which the firm tried to cultivate,” said Andrew Smith, partner, Corker Binning.


Read the full article on Thomson Reuters Accelus.