City watchdog ran up £5.9m bill pursuing iSoft case
THE City regulator the Financial Conduct Authority and its predecessor the Financial Services Authority, spent nearly £6m investigating and prosecuting four former bosses of software firm iSoft, it has emerged.
A Freedom of Information request submitted by Manchester law firm Pannone, which represented former iSoft finance director John Whelan, who along with ex-colleagues Tim Whiston and Steve Graham was cleared after a second trial collapsed – reveals the bill that was run up by the watchdog,
The North West trio, and a fourth former iSoft executive, Patrick Cryne (who was deemed too ill to stand trial), were accused of plotting to create “huge discrepancies” in the healthcare software suppliers accounts between October 2003 and July 2006.
The case against them was thrown out after a retrial at Southwark Crown Court last month following the non-disclosure of key information.
THE FOI request shows that between August 2006 and January 2010 the FCA spent £2,118,466.
At prosecution stage – from January 2010 to present £3,692,298 was spent.
Anthony Barnfather, regulatory partner at Pannone who represented Cheadle-based John Whelan said the costs are significant particularly given that the FCA’s current business plan for 2013/14 states that the entire enforcement budget for the year is £19.8m.
He said: “Having been unable to persuade the jury in the first trial in 2012 of the defendants’ guilt, the FCA pursued a second lengthy trial which ultimately collapsed as a result of errors on the part of the prosecution.
“The cost of the case should not be ignored and it is important that lessons are learned from this case. The FCA has stated that the collapse of this case was as a result of problems which arose “from a particularly unusual set of circumstances which are unlikely to recur”. However, the collapse of the case resulted from a disclosure error.
“This yet again illustrates the importance of the prosecution properly fulfilling its disclosure obligations. With its significant funding the FCA is in my experience one of the better prosecutors when it comes to disclosure. However this is a costly and embarrassing error for the organisation.”