REGULATORY TEAM OF THE YEAR

Regulatory

 

WINNER: Herbert Smith Freehills

On 14 September 2011, when UBS discovered that one of its equities traders Kweku Adoboli had incurred losses of more than $2bn, the bank immediately sought the advice of Herbert Smith Freehills' (HSF) dispute resolution team. The team swooped in to commence interviews with Adoboli and determine the circumstances under which the losses had occurred. It emerged that Adoboli had gone to great lengths to conceal the significant index futures position he had built up from the bank. Later that day, he was arrested by the City of London police and charged with fraud by abuse of position and false accounting.

HSF's dispute resolution team went on to represent UBS in the subsequent 40-day trial, which resulted in Adoboli being convicted on two counts of fraud by abuse of position and handed a seven year sentence. The team also advised the bank on a related FSA-led independent investigation into the losses, analysing UBS's systems and controls. As a result, the bank was fined £29.7m for its failings. HSF was required to juggle multiple work streams: managing the criminal process, the regulatory investigation, enforcement action, the actions taken in respect of relevant employees and the bank's reputational considerations, all under the glare of the media spotlight. The case involved analyses of interviews with more than 400 factual witnesses and the review of 5.9m documents. Ringing in at a total $2.3bn of losses, the case amounted to the largest fraud the UK has ever seen.

2ND: DWF

DWF's regulatory team advised longstanding client Iceland Foods after the Food Standards Authority of Ireland (FSAI) detected horsemeat and horse DNA in the retailer's beef burgers during testing. On 16 January 2013 the House of Commons Select Committee on Environment, Food and Rural Affairs announced it was to set up an inquiry into the contamination of beef products, during which Iceland was invited to provide written submissions and give evidence. DWF then had just three days to put together Iceland's submission for the Select Committee, providing a coherent explanation of Iceland's practices, covering both potential scenarios of fraud and/or accidental contamination.

DWF's team diverted negative press from Iceland by placing the horsemeat scandal in a wider European regulatory context. It also managed to steer the news agenda in Iceland's favour, participating in interviews with news outlets including Sky News and The Financial Times. For the judges, DWF's “quick reactions and good judgement” were able to safeguard the business's reputation.

3RD: Lawrence Graham

A multi-disciplinary team at Lawrence Graham was appointed to conduct an urgent independent and confidential investigation into the alleged manipulation and false reporting of LIBOR for existing client the British Bankers' Association (BBA). It was suggested that the BBA had been aware of attempted Libor manipulation by Barclays Bank. The team's brief was to establish the facts in the period under review, 2007 to 2009, and provide confidential advice into both the rate-fixing allegations and related employment law matters.

During the investigation, the team reviewed the Barclays transcripts, about 450,000 documents, 120,000 items on back-up tapes and unquantified imaged copies of computer hard drives. The team interviewed all BBA officers and employees, past and present, who had had any involvement in Libor during the relevant period. Lead partner Helga Breen also advised the BBA on a number of related employment law matters. Despite the ongoing media frenzy, the investigation was concluded in accordance with Lawrence Graham's terms of reference and project plan on time and on budget.