Two Ex-BOE Deputy Governors Said to Be Questioned in SFO Probeby
Gieve, Tucker interviewed by Serious Fraud Office this year
About 10 current, former BOE officials interviewed by SFO
A second former Bank of England deputy governor was interviewed by U.K. prosecutors over the possible manipulation of central bank liquidity auctions at the height of the financial crisis, according to a person with knowledge of the situation.
John Gieve, a BOE deputy governor from 2006 to 2009, was questioned by the Serious Fraud Office earlier this year, said the person, who didn’t want to be identified because the interviews are private. Paul Tucker, Gieve’s successor, was also questioned by the prosecutor in recent months. Both men were treated as witnesses, according to the person.
The interviews are part of an investigation, known as “Project Tile” at the BOE, looking at whether emergency liquidity mechanisms provided by the central bank during the financial crisis were manipulated. As money markets froze in 2008, the BOE allowed banks to swap a wider range of assets for funding through programs including the so-called Special Liquidity Scheme, a plan that allowed banks to exchange securities for U.K. treasury bills.
A central focus of the SFO probe is whether BOE officials told lenders what prices to bid at the auctions to play down questions about the health of their institutions. The SFO became involved after the central bank commissioned senior trial lawyer Anthony Grabiner to conduct an internal inquiry into the auctions. The prosecutor has interviewed about 10 current and former BOE officials since opening its investigation in November 2014, the person said.
Gieve declined to comment when reached by phone Wednesday. A spokesman for Slaughter and May, the law firm representing Tucker, declined to comment as did officials at the BOE and SFO. Tucker’s interview was first reported by the Financial Times on Sunday.
The SFO is planning to decide whether to pursue charges in the case by the end of the year. Individuals who worked at the banks involved in the auctions have also been interviewed.
The probe was the second scandal to emerge from the central bank in 2014 after it was dragged into a global investigation into foreign-exchange manipulation. It’s since reviewed and strengthened its market intelligence operations, including having greater oversight of information gathering and usage.
The BOE probe is one of a number of high-profile cases the SFO is investigating. The agency is also looking into Barclays Plc over its fundraising from Qatari investors during the financial crisis, alleged bribery at Rolls-Royce Holdings Plc, and Tesco Plc over its accounting practices.
SFO Director David Green told a U.K. parliamentary committee Tuesday the agency was planning to secure some "significant" deferred prosecution agreements with corporations over the coming months. Under a DPA, prosecution is suspended if a company agrees to certain conditions including paying a fine, repaying profits, and helping bring cases against individuals.