Raaah, aren’t the bankers evil? Crashing the economy and all that. Then giving themselves massive bonuses. Pure evil. Something must be done. It is time for a reckoning. Hard to disagree and so a nice easy run for Ed Miliband in his recent speech. The weird thing is that the speech actually committed a Labour government to doing things which were already happening, doing things it didn’t have the power to do without primary legislation, and doing things which might lead to answers it didn’t like.
Dairy farmers are protesting at cuts in the prices they are being paid for milk by processors (the businesses which bottle up their milk or turn it into butter, cheese, yogurt and other products) and supermarkets. It certainly does sound pretty bad that apparently the prices are now so low that they don’t even cover the costs of production so that dairy farmers make a loss on every pint of milk they sell.
However, the difficult question is what should be done about it. Continue reading
Much has been and will be written about the revelations that traders at Barclays Bank made misleading reports of the bank’s borrowing rates when contributing to the setting of LIBOR rates over a period of years. Both the US and UK authorities have imposed fines in the hundreds of millions of dollars on the bank – large but not in the context of the bank’s own profits (around £5bn) or the size of the global interbank lending markets (which might be in the region of $300 trillion). Emails seen by the regulators and published after the fining decisions look depressingly and suspiciously “chummy” with traders seeking to have the figures massaged for enough personal or business gain to make them offer bottles of expensive champagne in return for such favours. From a lay perspective, the endemic dishonesty of the bankers involved seems to speak for itself.
So, unsurprisingly, there have been calls (from commentators all the way up to Ed Miliband, the leader of the opposition) for criminal prosecutions of everyone involved as well as for leading bankers, like the CEO of Barclays, Bob Diamond, to resign, be sacked, repay all their bonuses, be put in jail, and placed in stocks outside the Bank of England. Or all of those things. Landing a hit on Diamond is particularly sweet for many because Barclays had infuriatingly managed to hold the nearest to the high ground available to any bank during the financial crisis by not having had to receive a direct bail out from the government.
But, accepting that there was clearly something wrong and criminally wrong about the behaviour of Barclays traders (and potentially those in the 19 other banks which are still being investigated and which were not as co-operative as Barclays in putting their hands up to what had happened), what crimes may have been committed and how might they be prosecuted in the UK?
There are three main options, first, as offences under the Fraud Act 2006, second as common law conspiracy to defraud and third, as instances of the cartel offence under the Enterprise Act 2002. Although the cartel offence is not an immediately obvious one to apply here, for practical reasons it may offer the most effective approach to take.