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SFA ready to charge Barings executives


Financial Editor

The nail-biting wait by Baring's disgraced top management is expected to end today with the announcement by the Securities and Futures Authority of disciplinary action.

Sources close to the City watchdog said some of the 13 senior executives under investigation have been cleared of blame for the spectacular bank collapse in February last year. But several others will learn that the SFA is taking action against them. This could result in fines, and a range of penalties from reprimands to being banned from ever working in the securities industry again.

While pinning the central responsibility on Nick Leeson's unauthorised derivatives speculation for the breaking of Barings under nearly pounds 900m of losses, the reports by both the Singapore investigators and the Bank of England sharply criticised the complete failure of management controls. In his recently published book, Rogue Trader, Leeson, who is serving a six-and-a-half year sentence in Changi prison, Singapore, painted a damning picture of greed and incompetence among Barings' top executives.

Any of the 13 executives who wishes to work again in the City will have to re-register with the SFA. Some may find it difficult to do so in a senior management position. Peter Baring retired after the humiliation of Barings' demise, and is not believed to be looking to start up again. Andrew Tuckey, who was well-known as a City high flyer before the fall, has been working on an informal basis with Barings as a consultant, and hopes to be cleared to resume his career. Two of the individuals most criticised in the official investigations were Peter Norris, the former chief executive, and Ron Baker, Nick Leeson's direct London boss.

Once the SFA notifies the executives that it is taking action against them, they will face the so-called "ticking clock" disciplinary timetable. From the moment the notice is served, the executives have 10 working days to make a written defence or a settlement proposal. The negotiations with the SFA then begin. After 20 working days, the executive's lawyers must put in their full defence if they want to contest the action and go to a tribunal.

If the executive fails to file a defence, the penalty takes effect and is published. But sources said executives always avoid this outcome.

If the executive wishes to contest the action, the tribunal panel chairman, Judge Colin Kolbert, takes over the case on day 30.

This then turns into court proceedings, and if the defendant wants to fight the SFA, the matter could go on for several years. But during this time, the executive will find it difficult to work in the City, and the legal fees can be considerable.

Some of the most senior executives concerned in the Barings crash are expected next month to give the first public account of their actions, when they are called to appear before MPs on the influential Treasury select committee. Peter Norris was spotted last month privately attending one of the Treasury's committee's other investigations as a dry-run for his own hearing.

Individuals investigated

Peter Baring, former chairman

Andrew Tuckey, ex-deputy chairman

Peter Norris, ex-chief executive

Ron Baker, ex-head of Financial Products Group

Geoffrey Barnett, former chief operating office

Geoffrey Broadhurst, former finance director

Tony Gamby, former head of settlements

Brenda Granger, former head of futures and options settlements

Anthony Hawes, ex-treasurer

Ian Hopkins, former head of group treasury and risk

George MacLean, former head of bank group

Helen Smith, former manager, market risk

Mary Walz, former global head of equity derivatives