Following the Rules

Today’s guest  was the first person in the world to be jailed for rigging the London interbank offered rate a benchmark that helped to determine interest rates or mortgages in sizeable corporate loans. He is also one of the only bankers to be sent to prison after the financial crisis. Tom Hayes is a former UBS and Citigroup trader who spent half of his 11-year sentence in prison. His release in early 2021 came after the four other former traders convicted in the Libor manipulation scandal had completed their prison terms. Eight others embroiled in the scandal were acquitted without charge. He had unwittingly made it easy for prosecutors to earmark him for harsher treatment by first cooperating with the UK's serious fraud office, providing them with hours of incriminating interviews before switching tack and deciding to fight his case. The UK's criminal courts did not look kindly upon that move. In 2017, lawyers for Hayes submitted this case to the Criminal Cases Review Commission, which is an independent body responsible for investigating suspected miscarriages of justice in a bid to have his conviction quashed. His legal team have long claimed that his autism diagnosis ahead of his 2015 trial was not given due consideration in court and has argued that the prosecution used witnesses who were not experts and held back important items of evidence from the defense. The CCRC has had the option to refer Tom's your case to the court of Appeal if it decides there's a real possibility that his original conviction could be quashed by the court. In late 2021, it decided to provisionally reject his efforts to appeal his case. Hayes and his legal team have since had the opportunity to push back on that decision and that pushback has become more pronounced last year when a US Court dismissed its criminal indictment against Tom. In November, the CCRC took the unusual step of inviting Hayes’ legal team to give their views on whether the US Court decision should prompt his conviction to be overturned, which suggests it is reconsidering its earlier position and that Hayes’ six year long fight to clear his name now looks set to be nearing an end. We discuss his ongoing efforts to clear his names, how he is moving on both personally and professionally from a lost decade, and what today’s finance execs can learn from his story. --- In response to Hayes' comments in this episode, a CCRC spokesperson said:  "This is a large, complex case and no final decision has yet been made by the CCRC on whether to refer it to the Court of Appeal.  However, a CCRC committee is scheduled to meet on 13 March 2023, to discuss and assess the case further.”  A spokesperson for the SFO said that the prosecution agency's investigations into interest rate rigging had "followed the criminal justice process in England and Wales". "As a result of the investigations, nine individuals either pleaded guilty or were found guilty by a jury,” the spokesperson said. "A number of those convictions have been reviewed by the Court of Appeal and none of them have been overturned."  

Today’s guest outlines where in the financial services sector compliance professionals will be able to find new jobs and salary increases in the coming months, and where we can expect a slowdown in recruitment. He details the common mistake finance bosses make when hiring and promoting back-office expertise and how to avoid them. And he explains why – and how – financial services execs must act now to help close the gender pay gap in compliance.  Jonathan Skerrett is the founder and director at Rutherford, a recruitment firm that specialises in placing compliance officers in roles within the financial services sector. 

Today’s guests set out how financial services firms should best respond to the now myriad and rapidly-changing environmental, social and governance requirements in existence worldwide and the steps they should take now to prepare for formal or informal challenges to their ESG credentials. They outline the role of legal and compliance staff as well as front office executives in such responses and the common mistakes such individuals should avoid. They also discuss the ESG-related challenges that they believe not enough people are paying attention to. Nicola Higgs advises banks, fund managers and insurers on UK and European financial services regulatory matters as a partner in law firm Latham & Watkins’ London office and global co-chair of the firm's financial institutions industry group. Simon Welch oversees banking group Credit Suisse’s legal response to sustainability-related matters as its head of legal for sustainability.   ***EPISODE NOTES*** During the episode, we discuss five ESG-related questions that boards governing financial institutions should ask themselves. These are listed below. Which aspects of the sustainable finance agenda are relevant to your firm and how do you track, monitor and adapt your corporate strategy in response to this? Do you have the right collective expertise within your executive team to understand the risks and opportunities the ESG transition poses for the business? Who are the key stakeholders involved in the delivery of the ESG transition strategy? Is there a clear understanding as to where responsibility sits within the 3 lines of defence? What are the necessary information flows between these stakeholders? What steps have you taken to ensure that your clients and external stakeholders have a clear understanding of your ESG strategy? What action have you taken to ensure that staff have a consistent understanding of your ESG strategy in the context of your wider corporate purpose?

Today’s guest explains what he believes the right regulatory response to the collapse of crypto exchange FTX would be. He details the policies UK lawmakers and regulators should consider as they seek to more closely police all things crypto while also establishing the City’s as a competitive finance hub post-Brexit. And he outlines what EU policymakers got right and where he believes they went wrong in their regulation of the sector. Tom Duff Gordon’s 20-year career includes 5.5 years overseeing banking group Credit Suisse’s government relations and regulatory policy in the EU and UK. Since June, he has led crypto exchange Coinbase’s approach to regulatory change outside of the US as its vice president for international policy.

Today’s guest urges UK lawmakers to create a replacement body to the audit, actuarial and accounting watchdog the Financial Reporting Council “as fast as possible”, almost four years after such a move was first recommended. She lays out the case for the UK government to prioritise better, simpler rule-making over more regulation when looking to reform the UK’s financial services rulebook post-Brexit. She outlines how boards and investors should best approach increasingly-complicated environmental, social and governance regulation, and offers tips on how to avoid common mistakes when addressing ESG reporting requirements. Kate O’Neill is a former lawyer whose 30-year career includes stints as director of European funds and hedge funds at asset manager Janus Henderson Investors and managing director for investor relations at Lloyds Banking Group. Since 2020, she has overseen the creation of the FRC’s Stakeholder Engagement and Corporate Affairs function.

Today’s guest outlines how she believes UK lawmakers and regulators can best retain and grow a competitive fintech hub both in a tough economic period and the City’s new post-Brexit era. She details the achievements of the UK’s approach to open banking, and offers advice on how to move this initiative forward.  These are ideas we should see feed through into action because Charlotte Crosswell is not only completing her mandate as chair and trustee of the Open Banking Implementation Entity, but has recently been appointed as the chair of the Government's new Centre for Finance, Innovation and Technology. Her 26-year career also includes roles as CEO of lobby group Innovate Finance, and president of exchange Nasdaq.

Today’s guest calls out UK finance regulators for their vocal opposition to proposed new government powers that would see lawmakers able to call watchdogs in to explain aspects of their approach to policing the City, arguing that such a stance is both “self delusion” and “constitutionally wrong”. He calls on the UK’s Financial Conduct Authority to stop seeing City executives as “a bunch of criminals” and do more to engage with financial services professionals. He explains why he believes that reinstating City intelligence gatherers known as ‘grey panthers’ and establishing a proper secondment process at the FCA would ultimately help the watchdog better understand and police the sector. He also outlines how parliament should best analyse the impact of changes to UK rules post-Brexit, and plenty more in between. Philip Warland’s views have been crystallised over a 50-year career in financial services, which includes stints at the UK central bank the Bank of England, and banking group Standard Chartered. His last full-time role was at fund manager Fidelity International where he spent seven years leading its government affairs division as its head of public policy until 2017. He now advises several companies on regulatory matters but is speaking to Following the Rules in a personal capacity.

Today’s guest outlines the steps UK institutions, and their regulators could take now to prevent London from losing its status as a global clearing hub. He details the regulatory changes to equity markets and pension fund rules that UK lawmakers should consider to ensure the City retains its global leadership in financial services post-Brexit. And he explains how a proposed 2017 merger between the London Stock Exchange Group and its German rival Deutsche Börse could have helped London better navigate some of its most complex Brexit issues. These are all subjects he is considerably well-versed in because Xavier Rolet ran the London Stock Exchange Group as its CEO for nine years until November 2018. Since then, he has held a number of CEO and chairmanship positions across major global financial institutions including the hedge funds CQS and Shore Capital.

Today’s guest outlines why, in a time of significant cuts to public services, the UK government should consider increasing funding for the Serious Fraud Office, the UK’s top prosecution agency for white collar crime. He also lays out the case for significantly simplifying the workload of the UK markets watchdog the Financial Conduct Authority and offers tips for those looking to pursue a career at the regulator. Sasi-Kanth Mallela is a former regulator and criminal prosecutor. His 22 year career includes stints as a case controller at the SFO and as a technical specialist in the enforcement division of the FCA. He left the FCA in June to join consulting firm Ankura, where his work includes advising financial services firms on their risk and compliance obligations.   ***PODCAST NOTES*** This podcast was recorded before Liz Truss resigned as Prime Minister.  

Today’s guest explains how he would like to see the UK parliament’s influential Treasury Select Committee change to best regulate new asset classes like crypto. He details the regulatory priorities he believes the next UK government should have to future-proof the UK financial services sector. He also outlines his concerns around the UK markets watchdog’s ability to cope with its ever-expanding to-do list, and outlines how parliamentarians can best address the issue now to help the City remain competitive post-Brexit. Lord Chris Holmes is an award-winning Paralympian, who has been a Conservative peer in the House of Lords since 2013.