ALEX BRUMMER: The SFO's frustrating efforts to bring justice to bad bankers
When it comes to bringing justice to bad bankers David Green, the director of the Serious Fraud Office, is a frustrated enforcer.
American prosecutors have the catch-all of ‘wire fraud’ to fall back on when all else fails, but Green thinks the odds are stacked against him. The bar of proof for conspiracy to defraud, a potential charge, is too high.
The SFO chief also argues the access of banks and big corporations to ‘magic circle’ City law firms – brought in to conduct internal inquiries – contaminates the crime scene before his own investigators move in.
Frustrated enforcer: SFO director David Green
Enforcers look as if they are going to get a little help tonight from George Osborne. The Chancellor has already implemented the recommendation of the Independent Commission on Banking for a criminal offence of ‘reckless banking’.
Osborne also seems to recognise the importance of preserving the integrity of the $5trillion foreign exchange market, some 40 per cent of which is based in London. There is a concern in Whitehall and the Bank of England that market rigging of foreign exchange rates is a scandal every bit as big, if not bigger, than Libor and getting ahead of the curve is important.
The last thing the Tories want in the run-up to next year’s general election is another enormous banking scandal and any suggestion that this Government, like its predecessor, has somehow gone soft on the bankers, even if it has.
What is certain is that changing the law may be easier than changing ‘the world owes us a high-living’ attitude of bankers. At a time when the incomes of most employees are still being squeezed, 68 per cent of financial sector workers say they are not satisfied with their 2014 bonus, says Hays jobs agency.
Santander, at least, looks to be taking financial crime seriously by taking on Sharon Campbell from the Financial Conduct Authority as the bank’s first director of financial crime and intelligence, with anti-money laundering a key focus. After the Mansion House there may be a longer list of wrongdoings to be rooted out.
Lost kingdom
A 1.1 per cent decline in same store sales at J Sainsbury may not be quite the send-off Justin King would have preferred as he heads for new horizons.
But when the chief executive looks back over the past decade and the transformation achieved, he has reason to feel ebullient.
Of the 41 quarters he has presided over, King has been in positive territory some 36 times. This is a record that is impressive given Sainsbury’s was a grocer struggling with transition when he took over. At a moment when so much of the talk in the grocery sector is about price – led by the German interlopers Lidl and Aldi, but joined by Wm Morrison – King sensibly talks about values, the social contract between supermarket and supplier and the relationship with customers.
Even when one discounts the florid marketing guff, there is a semblance of truth in this, and Sainsbury’s likes to think its mincemeat and bananas are more trusted than rivals. The group has also moved in the direction of the consumer by making the shift from large stores to the convenience format with sales through these shops up 18pc year-on-year.
Sainsbury’s also has invested in some original till technology which provides for price matching and Nectar points.
Nevertheless King’s successor, Mike Coupe, does not face an easy task. The food market is not expanding at the same pace as in the past, discounters are making an impact and because Sainsbury’s straddles M&S and Waitrose at the top end of the grocery scale, with Tesco in the middle, there are dilemmas on quality and price.
Whether Sainsbury deserves to be among the most shorted stocks in the FTSE100 is a different matter.
Changing the guard can be troublesome, as we have seen at post-Leahy Tesco and post-Rose Rolls-Royce. But there is also an opportunity for some fresh thinking and initiatives. In Sainsbury’s case the footings put down by King look reasonably secure.
Uber threat
Over the decades London’s emblematic cabbies have faced many threats, ranging from the rise of the mini-cab challengers – such as Addison Lee – to the collapse of the traditional taxi-maker Manganese Bronze.
None may be more serious, however, than the rise of Uber, a digital enterprise backed by Google and Goldman Sachs, that uses a smartphone app to view cars nearby, hail the driver and operates an advanced time and distance payment system.
Currently on the streets of New York, Sydney, Paris, Berlin and Brussels, Uber is valued by investors at $17billion (£10billion).
This almost makes the feisty army of 22,000 green-badge holders, proud students of the Knowledge, look an oppressed minority.
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