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Categorized | Banks, Financial

Barclays misused documents to sack executive, court told

Posted on November 25, 2016

Barclays’ most senior legal officer breached a pledge to criminal investigators by using a copy of their interview with the bank’s chairman of financial services to sack him, a court has been told.

Bob Hoyt, the bank’s general counsel, used a transcr‎ipt of Richard Boath’s questioning under caution by the Serious Fraud Office in 2014 to dismiss him, Mr Boath’s lawyer told a London employment tribunal as part of his unfair dismissal and whistleblowing claim against the bank.

This had the effect of breaching a pledge to the SFO to only use the transcript for a legal dispute that was going on between the SFO and Barclays at the time, Jonathan Cohen QC for Mr Boath told the east London Employment Tribunal on Friday.

The SFO questioned Mr Boath and other former Barclays top brass — including the ex-general counsel, Mark Harding, and the former general counsel of the investment bank, Judith Shepherd — as part of its four-year criminal investigation into the bank’s 2008 fundraising, when it turned to investors in Qatar and Abu Dhabi to stay out of government control.

Mr Boath has co-operated with the SFO, which is yet to make any charging decision in the probe, for which the SFO has received special government funding. It passed a transcript of his interview to Barclays as part of a legal battle with Barclays to obtain material that the bank claimed was covered by legal privilege. This keeps confidential ‎any advice between lawyers and their clients even during a criminal probe.

An exception to this is if lawyers are believed to be part of an alleged fraud. This is known as the “fraud exception”.

Richard Lissack QC for the bank said on Friday Mr Hoyt had been passed Mr Boath’s transcript ”as part of the crime fraud exception”.

He went on to say that the bank rejected “utterly speculative, ill-guided and tendentious comments. The characterisation which [Mr Cohen] gives to individual senior lawyers regarding how they use materials disclosed as part of the crime fraud exception the bank rejects utterly”.

The privilege issue was resolved earlier this year after another private hearing between the SFO and the bank. Barclays has now given the SFO 100,000 fresh documents.

Barclays also denies any breach of its undertaking to the SFO about the transcript.

Mr Cohen told the tribunal earlier this week that Mr Boath was fired “as a direct result” of the SFO passing Barclays its transcript of his interview-under-caution, which is when suspects are read their rights.

Barclays has responded that Mr Boath does not have a proper whistleblowing claim and that it denies and will fight his allegations.

This week has been taken up entirely with arguments as to whether Mr Boath’s ‎hearing or parts of it should be in private — and indeed, whether a hearing to determine that point should itself be in private, as is desired by the bank and the SFO.

The Financial Times is among several media outlets fighting the application.

The delay has the effect of postponing Mr Boath’s substantive 10-day hearing. The SFO has said recently it hopes to make a charging decision by March 2017. If charges are laid, the UK media are under automatic restrictions on what can be reported before trial.

A spokesman for Barclays said: “Barclays completely refutes the wholly unfounded allegation made, which is simply an attempt to inflict unwarranted reputational damage to the bank and its general counsel.”