Early one morning in July 2016, Robert Bogucki, a senior executive at Barclays PLC, entered what he expected to be a short meeting with British bank lawyers to review a five-year-old transaction before join his family on vacation.
Instead, he emerged after 11 hours of questioning which, 18 months later, led to his criminal indictment – and ultimately a trial that would reveal some flaws in a major Justice Department campaign to police Wall Street. which continues to this day.
Mr. Bogucki oversaw over-the-counter foreign exchange trading, including options, a private corner of the financial markets used by corporations, banks, hedge funds and other sophisticated investors without any regulatory oversight at the time. . The DOJ alleged that it committed fraud by using the information of a client company to earn money for the bank at the client’s expense.
Propelling the case has been an aggressive push by the Justice Department, beginning several years after the 2008 financial crisis, to prosecute individual wrongdoing on Wall Street – a response in part to criticism from lawmakers and others that the government ‘was too focused on imposing fines on banks without punishing people.
Sally Yates, who became deputy attorney general in 2015, formalized one of the strategies in a memo that year, saying companies would only get full co-op credit if they revealed everything they did. knew about employee wrongdoing. Aiming for more lenient treatment for themselves, banks searched their internal records for evidence of misconduct by their own employees.