There is a well worn adage that suggests that in any business, when all is well, accountants and lawyers are needed, and when all is going not so well, accountants and lawyers are needed.
This most certainly rings true in the case of the recent investigations into FX benchmark manipulation which concluded in November with $4.3 billion in fines administered to a series of major banks whose FX desks are among the largest in the world. With the civil and regulatory penalties now in place, the criminal probes have begun into the activities of individual employees of the implicated banks.
The entire litigation industry which has surrounded the civil investigations has reaped rewards for being involved in the investigation.
British corporate, financial and commercial law firm Travers Smith, which worked alongside Lord Grabiner, QC on the investigation into the Bank of England’s involvement in FX rate fixing last year, has been paid £2.2 million for its contribution to an independent inquiry into the Bank of England’s alleged part in the high profile case.
According to law industry portal thelawyer.com, the inquiry cost the Bank of England £2.93 million, of which 68% was paid to Travers Smith.
Lord Grabiner was appointed in March 2014 to lead the investigation into the Bank of England’s activities regarding the at the time alleged FX rate fixing.
Lord Grabiner was paid £401,000 for his efforts, whilst Adam Rushworth, an Essex Court junior who supported him was remunerated £106,000.
Travers Smith allocated a team of up to 12 lawyers for the inquiry, which between the lawyers in the group, 1.8 million documents and 87,000 telephone call recordings were investigated.
As far as other firms are concerned, North American legal and corporate consultancy firm Huron Legal, which is the litigation arm of Huron Consulting Group (NASDAQ:HURN) was paid £107,115 for processing and hosting electronic documents which at the time of investigations were under consideration.
Big data firm Nexidia was paid £80,500 for the same role in relation to telephone calls, while legal case analysis and transcript firm Opus 2 was paid £14,000 for its transcribing interviews by Lord Grabiner.
The fees were disclosed in a letter from Andrew Habgood, chairman of the governing court of the Bank of England, to the House of Commons Treasury Committee following pressure from MPs.
Habgood noted: “Lord Grabiner and Travers Smith carried out their work at a discount to their normal commercial rates.”
According to the report, Travers Smith is considered to have strong ties to the Bank of England, as a result of Corporate Recovery executive Jeremy Walsh and Corporate Finance Partner Anthony Foster having been seconded to the Bank of England in consultancy capacities during the financial crisis.