Legal Business

City firms called on as SFO launches Euribor prosecution against Deutsche Bank and Barclays staff

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Litigation BarclaysDeutsche Bank
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K&L Gates, Stephenson Harwood, Herbert Smith Freehills are among the City law firms instructed as the Serious Fraud Office (SFO) today (13 November) issued the first criminal proceedings against ten former employees of Deutsche Bank and Barclays accused of manipulating the Euro Interbank Offered Rate (Euribor).

Employees from both banks have been charged with ‘conspiracy to defraud’ following the SFO’s ongoing investigation into the manipulation of Euribor, which saw European regulators accuse banks of colluding to manipulate the key interest rate benchmark in an attempt to influence the prices of financial instruments.

The criminal proceedings come after Deutsche Bank, Barclays, Royal Bank of Scotland and Société Générale admitted their involvement in a Euribor cartel in 2013. The banks, excluding Barclays, accepted a fine of £850m between them.

Deutsche Bank employees accused include high profile trader Christian Bittar, as well as Achim Kraemer, Andreas Hauschild, Joerg Vogt, Ardalan Gharagozlou and Kai-Uwe Kappauf. They will be represented by K&L Gates, Howard Kennedy, Hickman Rose, Stephenson Harwood, Kingsley Napley, and Brown Rudnick respectively.

Barclays Bank employees Colin Bermingham, Philippe Moryoussef, Sisse Bohart and Carlo Palombo will be defended by Herbert Smith Freehills, Hickman Rose, Morton L Wagner, and Simon Muirhead and Burton respectively.

Emma Deacon of 5 Paper Buildings and James Waddington QC of 9-12 Bell Yard will represent the SFO.

The SFO said criminal proceedings will be issued against other individuals ‘in due course’. The charges are the first in the SFO’s investigation of interest rate manipulation that relate to Euribor.

The defendants will make their first appearance at Westminster Magistrates’ Court on 11 January 2016 while the SFO’s investigation continues.

The proceedings follows recent success for the SFO, which secured the conviction of former UBS and Citigroup yen derivatives trader Tom Hayes, in August of conspiracy to defraud in the Yen Libor setting process and sentenced to 14 years in prison.

sarah.downey@legalease.co.uk

Legal Business

In-house: Barclays picks Simon Croxford to fill expanded deputy GC post

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In-house Barclays
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Less than six months after returning to Barclays‘ HQ in Canary Wharf, Simon Croxford has been selected to replace the banking giant’s outgoing deputy general counsel (GC) Michael Shaw.

The role, which will be renamed GC of Group Centre Legal, will see Croxford become one of the most senior lawyers at Barclays, reporting directly to Bob Hoyt group GC. In this role Croxford will assume Shaw’s responsibilities for supporting Group Centre and each of the competition, financial crime, M&A, employment incentives and pensions teams and the group GC’s office will report into him.

Croxford, who left his post as Asia Pacific GC in May to become GC for the bank’s European investment banking division, will assume his new role when Shaw leaves Barclays at the end of September.

Having started his career as a corporate finance lawyer at Magic Circle firm Linklaters, Croxford had a short stint at Swiss bank UBS before joining Barclays in 2005. On arrival, Croxford was responsible for managing the legal team across Barclays’ investment banking arm in Europe and the Middle East.

Shaw is one of a string of high-profile lawyers to depart Barclays in the last 12 months following a restructuring of its legal function. The bank has moved to create pools of lawyers working across its four core business divisions, instead of running separate legal divisions for its personal and corporate, Barclaycard, investment bank and Africa businesses.

Erica Handling, who Croxford replaced as European investment banking general counsel earlier this year, recently took up a position at BlackRock, with global head of financial crime Jonathan Peddie and global corporate and investment banking general counsel Judith Shepherd having also left the bank this year.

tom.moore@legalease.co.uk

Legal Business

Further legal exits for Barclays as corporate banking GC departs for Lloyds

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In-house BarclaysLloyds Banking Group
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Just a day after Lloyds Banking Group announced the hire of Linklaters’ managing partner Simon Davies, the bank has also hired Barclays’ global head of legal for corporate banking, Joanna Carver.

Carver, who joined Barclays in December 2006 as acting head of legal, will be supported in her new role by current interim general counsel (GC) for commercial banking Greg McEneny, who will become deputy GC.

The news follows Lloyds’ hire of Davies, who will joining the group as chief people, legal and strategy officer when we retires from Linklaters at the end of the year – a year ahead of his current term. He will also take a place on the bank’s executive committee. Both Carver and Lloyds’ new group GC Kate Cheetham will report to Davies.

During her time at Barclays, Carver held a number of roles including head of legal for asset and sales finance and regional GC for corporate in Russia and western Europe. She also worked in house at European multinational aerospace and defence corporation Airbus group and at Dentons legacy firm Wilde Sapte.

Barclays’ has suffered multiple departures since the start of the year, and yesterday (July 1) the bank also saw the exit of its investigations and enforcement head Jake McQuitty, who joined TLT as a partner in the firm’s financial services team.

Last month Barclays’ deputy group GC Michael Shaw announced he would be leaving his post at the end of September following six years in the role.

His departure, which a spokesperson said was down to ‘family reasons’, follows a spate of legal exits from Barclays, including EMEA GC Erica Handling, who recently took up a position at BlackRock, global head of financial crime Jonathan Peddie, and global corporate and investment banking GC Judith Shepherd, since it streamlined its legal function. Barclays is seeking to create pools of lawyers working across its four core business divisions, instead of running separate legal divisions for its personal and corporate, Barclaycard, investment bank and Africa businesses.

kathryn.mccann@legalease.co.uk

Legal Business

TLT boosts City financial services offering with Barclays’ team head hire

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Strategic recruitment BarclaysTLT
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TLT has boosted its financial services offering with the hire of Barclays’ investigations and enforcement head Jake McQuitty, who joins the firm as a partner.

McQuitty, who currently heads up the team in Europe and the Middle East, has been at Barclays since 2010 and will join TLT’s London-based financial services litigation and investigations team, which is headed up by Andrew Lyon, in August.

Commenting on the appointment, the firm’s financial services and investigations head Jonathan Hoey said that McQuitty’s experience at Barclays would provide further support to the firm’s clients, particularly in retail and wholesale banking.

He added: ‘Jake has advised on a range of large scale and complex litigation and investigation matters, with a detailed understanding of corporate and investment banking products. This deep expertise will play a critical part as we continue to grow our investigations and contentious regulatory practices.’

McQuitty, who has experience overseeing some of the bank’s internal and regulatory investments over the last five years, was a senior associate at Lovells and Berwin Leighton Paisner prior to his role at Barclays.

His departure from the bank follows a string of high-profile exits. Just last month Barclays announced that its deputy group general counsel (GC) Michael Shaw would be leaving his post in September with a spokesperson saying the exit was down to ‘family reasons’.

Other recent exits include EMEA GC Erica Handling, who recently took up a position at BlackRock, global head of financial crime Jonathan Peddie, and global corporate and investment banking GC Judith Shepherd.

Last month TLT announced that its turnover had grown 8% to £62.5m in the 2014/15 financial year.

kathryn.mccann@legalease.co.uk

Legal Business

Mounting departures: Barclays’ Michael Shaw resigns as deputy general counsel

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In-house Barclays
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After six years as deputy group general counsel (GC), Michael Shaw has become the latest senior exit from Barclays‘ legal team which has suffered multiple departures since the start of the year.

The bank announced this morning that Shaw [Profile] would be leaving his post at the end of September with a spokesperson saying the exit was down to ‘family reasons’.

Bob Hoyt, who piped Shaw to become Barclays’ GC in October 2013, told staff in an internal memo: ‘After almost six years as group deputy general counsel, Michael Shaw has decided to leave Barclays at the end of September to pursue other interests.’

‘During his time with us, Michael has played a major role in helping Barclays navigate a number of legal challenges and has played a fundamental role in the leadership of the legal function… We will be conducting an internal and external search for a successor and Michael and I will work closely together over the coming months to ensure a smooth transition.’

Shaw’s decision to step down follows a spate of legal exits from Barclays, including EMEA GC Erica Handling, who recently took up a position at BlackRock, global head of financial crime Jonathan Peddie, and global corporate and investment banking GC Judith Shepherd, since it streamlined its legal function. The bank is seeking to create pools of lawyers working across its four core business divisions, instead of running separate legal divisions for its personal and corporate, Barclaycard, investment bank and Africa businesses.

During his time at Barclays, which has seen the bank investigated over manipulation in the Forex and Libor markets, Shaw has held a number of management titles. He is a current member of the firm’s citizenship council, legal senior leadership group and the disclosure advisory group, which advises the company on what has to be included in Stock Exchange announcements. He is also a past chair of the legal division’s diversity and inclusion committee.

Shaw joined Barclays at the end of 2009 from Herbert Smith, where he had been a corporate partner for over 12 years. At Herbert Smith he advised investment banks on Rio Tinto’s hostil bid for BHP Billiton and EDF on its takeover bid for British Energy.

tom.moore@legalease.co.uk

Legal Business

‘Not a naïve or vulnerable consumer’: Barclays wins capital loan claim against former Dewey partner

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Litigation Barclays
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The High Court has today (9 June) handed down its judgment in favour of Barclays Bank in a long running battle to secure repayment of a $540,000 loan together with interest from former Dewey & LeBoeuf partner Londell McMillan.

In a case that was closely watched by the industry as it tackled issues relating to liability in partner loan programmes, the dispute arose when Barclays negotiated and agreed a scheme around the end of 2005 with legacy Dewey Ballantine. After Dewey & LeBoeuf filed for Chapter 11 bankruptcy in 2012, the bank sought to recover some $56m in outstanding loans to over 200 partners, including McMillan. In 2013 Barclays filed a claim against McMillan and other former Dewey lawyers Lester Charles Landgraf, Lewis Rosenbloom, and Ellias Farrah.

Landgraf, Rosenbloom and Farrah settled out of court with the bank for an undisclosed sum before the first day of the hearing on 5 May and proceedings went ahead with just McMillan.

McMillan’s case was based on the assertion that he did not intend the agreement to be for the provision of partner capital because he did not want or need a loan for such purposes. He also maintained that he was confused by the communication and did not understand what he was signing was a loan necessary to fund his capital contribution. Presiding over the hearing, Justice Popplewell rejected the argument, stating it was ‘untenable in the light of the clear terms of the correspondence’.

He added: ‘McMillan was an experienced and senior partner in a major international law firm whom the bank could reasonably expect to understand the clear terms of the agreement which he signed, and to be able to assess the financial implications of doing so. Mr McMillan was not a naïve or vulnerable consumer.’

Popplewell further pointed to the structure being standard at the time for loan programmes, while there was nothing in the recovery terms that was unusual or unfair. He further held McMillan was under no obligation to finance his capital contribution by a loan from the bank and could have used an alternative scheme or any other personal source of funding.

A Barclays spokesperson said: ‘We are pleased with the court’s decision and reasoning, including the indemnity costs award. The vast majority of partners have repaid the sums owed already. Barclays will continue to robustly pursue those partners whose loans remain outstanding.’

Fountain Court Chambers’ duo Guy Philipps QC and Adam Zellick were instructed by Addleshaw Goddard partner Richard Clayton for Barclays Bank.

McMillan appeared in person with written submissions from 4 Stone Buildings’ pair John Brisby QC and Alexander Cook alongside Wilberforce Chambers’ John Wardell QC who were instructed by Candey partner Andrew Dunn.

Sarah.downey@legalease.co.uk

Legal Business

Going mainstream: Barclays breaks ground to forge first contract lawyer panel

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Adviser reviews Barclays
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After establishing a global two-tier panel last year, Barclays has launched a procurement process to formalise its flexible resourcing usage and establish its first contract-lawyer only panel.

A spokesperson for the bank confirmed the review was underway and the outcome was likely to take ‘months rather than weeks’. The panel will be used globally across the US, UK and Asia, but not all firms will necessarily serve all three markets.

Legal Business understands that the idea for a standalone contract lawyer panel was first mooted last year alongside the global panel review, however it was delayed due to time constraints and a heavy workload.

Over the last few years there has been an increased prevalence of contract lawyer services including Axiom, Berwin Leighton Paisner’s Lawyers on Demand and Pinsent Masons‘ Vario. It is understood that this is the first contract lawyer only panel arrangement for the bank, which previously used flexible resourcing on an ad hoc basis.

Following its global panel review last July, Barclays cut its global legal roster by 30% and moved to a streamlined two-tier system of ‘preferred’ and ‘approved’ firms running until 30 June 2016. Firms who made the list included a raft of US advisors such as Skadden, Arps, Slate, Meagher & Flom and Latham & Watkins.

Eversheds, TLT and Matthew Arnold & Baldwin were also appointed to Barclays’ preferred panel, which included all 11 firms that were previously on its mainstream ‘general advisory’ panel, namely Addleshaw Goddard; Allen & Overy; Clifford Chance; DLA Piper; Freshfields Bruckhaus Deringer; Hogan Lovells; Linklaters; Simmons & Simmons; Cleary Gottlieb Steen & Hamilton; Shearman & Sterling; and Sullivan & Cromwell.

The review also saw Barclays shake up how it interacts with its external advisers with the introduction of corporate value accounts. The initiative, incorporated in the panel arrangements, allocates law firms an annual sum representing the value of legal services they must provide through various services, primarily legal advice and secondments and if in deficit by the end of the term they must repay the amount owed to the bank.

kathryn.mccann@legalease.co.uk

Legal Business

Rumbling on: Barclays sets aside £800m to cover foreign exchange penalties as Deutsche profits hit by legal costs

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Litigation BarclaysDeutsche Bank
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Despite the spate of large scale settlements banks continue to set aside large provisions for legal spend with the latest, Barclays, setting aside £800m for investigations and litigation primarily relating to foreign exchange manipulation while Deutsche Bank put aside €1.5bn in the first quarter of 2015.

The figure has been released as the bank announced a 26% decrease in quarterly statutory profits to £1.34bn with it also setting aside an additional £150m provision for PPI redress. The last quarter of 2014 saw Barclays’ provision of funds set aside for Forex liabilities swell to £1.25bn. An additional £200m was allocated to redress customers mis-sold payment protection insurance. The Forex provision was enough to lead to a sharp fall in the booked profit of Barclays’ investment banking arm.

In November it opted out of a major settlement reached by five banks with UK and US regulators for allegedly failing to stop traders from trying to manipulate the foreign exchange market, with HSBC, Royal Bank of Scotland, UBS, JP Morgan Chase and Citibank collectively levied a £2bn fine.

The news follows Deutsche Bank’s announcement days ago of a sharp fall in profits after setting aside litigation expenses of €1.5bn in the first quarter of this year. Its litigation reserves were €4.8bn at the end of last year’s quarter.

On the latest results, Barclays’ group chief executive Antony Jenkins said: ‘Resolving legacy conduct issues is also an important part of our plan to transform Barclays. We are working hard to expedite their settlement and have taken further provisions of £800m this quarter, primarily relating to Foreign Exchange. While we still have much to do, I am pleased with how we’ve begun 2015.’

Barclays also saw a departure last month from its legal team with Nick Mirabella-Williams, senior vice president for global sourcing and supplier management, departing for the Co-operative Bank where he now serves as its head of professional services procurement. At Barclays, Mirabella-Williams jointly founded the Barclays Commercial Management Programme – a collaboration initiative between the bank’s sourcing and legal functions and was responsible for spend management, developing savings initiatives and risk and governance frameworks.

sarah.downey@legalease.co.uk

Legal Business

In-house: Barclays’ Asia GC set for EME investment bank role following Handling’s departure

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In-house Barclays
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Barclays has appointed Simon Croxford as general counsel (GC) for Investment Banking for the Europe and Middle East region (EME) following the departure of Erica Handling.

Croxford, who currently serves as managing director and GC for Asia Pacific, will initially keep his existing responsibilities and continue as a member of the Asia Pacific executive committee until a replacement is found. This will see him split his time between London and Asia though he will relocate to the UK during the summer.

Reporting to Mark Shelton, the newly appointed global GC and the regional GC for the Americas, Croxford will also take over responsibility for the legal coverage of Barclays Non-Core which is currently undertaking an asset disposal programme. He will also remain a member of the group and investment bank legal executive committees and lead on developing the bank legal team’s global colleague agenda.

Croxford joined Barclays’ London office in 2005 from UBS and previously led its legal team across EMEA before being made GC for Asia Pacific in 2012. Before UBS, he worked as a corproate finance lawyer at Linklaters.

Handling’s departure was announced last week, following those of global GC of corporate and investment banking Judith Shepherd and global head of financial crime Jonathan Peddie.

kathryn.mccann@legalease.co.uk

Legal Business

Mounting departures: Another senior exit for Barclays as EMEA investment bank GC steps down

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In-house Barclays
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Barclays’ EMEA investment bank general counsel (GC), Erica Handling, has left the bank, which has already seen global GC of corporate and investment banking Judith Shepherd and global head of financial crime Jonathan Peddie announce their departures recently.

On top of her role as EMEA GC for the investment bank, Handling was a member of Barclays’ senior leadership group and sat on the group and investment banking legal executive committees. Her position also saw her lead the legal coverage for Barclays Non-Core, which is currently undertaking a large asset disposal programme.

In an internal memo, Shepherd said: ‘I would like to thank Erica for everything she has achieved at Barclays. She has been a valued member of my leadership team. Please join me in wishing Erica the best for the future.’

It is understood that Handling’s successor has been chosen and the appointment will be announced within the next couple of weeks. It is not known whether her replacement will be an internal or external one or where Handling will go next.

Handling, a former Ashurst lawyer, joined the bank in 2010 following ten years at the firm. She was widely acknowledged to have significantly contributed to the firm’s global finance practice and was part of the team to lead the firm’s launch into the US in February 2009

Barclays has already lined up Gibson, Dunn & Crutcher’s co-chair of financial institutions Mark Shelton to replace Shepherd.

kathryn.mccann@legalease.co.uk