By Pam Martens: February 18, 2014

Yesterday, the UK’s Serious Fraud Office brought criminal charges against three more individuals in the matter of rigging the interest rate benchmark known as Libor. But the sum total of what we learned about those charges from the Serious Fraud Office are the following two sentences:

“Criminal proceedings by the Serious Fraud Office have commenced today against three former employees at Barclays Bank Plc, Peter Charles Johnson, Jonathan James Mathew and Stylianos Contogoulas, in connection with the manipulation of LIBOR.  It is alleged they conspired to defraud between 1 June 2005 and 31 August 2007.”

There was no formal criminal complaint released to the press; no smoking gun emails; no transcripts of collusion in chat rooms. Just the above two sentences.

In the U.S., we are certainly not getting financial crimes by the big banks under control any better than the UK but at least we provide the public with an evidentiary basis for charging people or institutions with crimes (making sure, of course, that nobody at the top ever sees the inside of a jail cell). If the same charges had been leveled yesterday in the U.S., here’s how it would have gone down: the night before, the details of the charges and the most titillating emails would have been leaked to the New York Times and Wall Street Journal. A press conference would have been preannounced and held in time to make the evening news. Preet Bharara, the U.S. Attorney for the Southern District of New York, part of the U.S. Department of Justice, would have shown up at the press conference with flip charts and flanked by at least one representative from the FBI.

Take the January 7 press conference to lay out the criminal charges against JPMorgan for facilitating Bernie Madoff’s fraud. Bharara’s press release was over 2300 words and the supporting documents with specific details of the crimes numbered more than 30 pages. (No individuals were charged and the bank was allowed to sign a deferred prosecution agreement – but, hey, the public got hundreds of sleazy, slimy, sordid details of how the crooks worked their scheme. We may not get justice in the U.S. but at least we get details.)

The UK’s Serious Fraud Office tells us on its web site that its “overarching aims and objectives” are to reduce “fraud and corruption”; deliver “justice and the rule of law”: and maintain “confidence in the UK’s business and financial institutions.”

Given that we now know that Libor was rigged under the nose of the British Bankers Association; that the UK’s Financial Conduct Authority has acknowledged that the foreign exchange markets in the UK have been rigged just as abominably as Libor; and allegations are currently flying that Bank of England officials approved of the sharing of information between traders from competing firms in the foreign exchange market – the Serious Fraud Office has to get a failing grade in maintaining confidence in its financial institutions.

And here’s why it matters to every breathing, investing American. Every time the U.S. public launches a protest or march or hearings to rein in the abuse of the big Wall Street banks, some politician or lobbyist or editorial writer at the Wall Street Journal warns us that our too-big-to-fail banks will move to London if we don’t let them have their way with derivatives or proprietary trading or dark pools or high frequency trading or what have you. This perpetual, ill-conceived whining has set up London and New York prosecutors in a perpetual race to the bottom.

New York’s incessant Whiner-In-Chief is Senator Chuck Schumer. Back on November 1, 2006 – one year before Wall Street would begin to collapse under the weight of its corruption, enabled by lax regulation – Schumer and Mayor Bloomberg wrote an OpEd for the Wall Street Journal titled “To Save New York, Learn from London.” (Today it reads like a skit from a Stephen Colbert episode.) The two staunch Wall Street cheerleaders were worried about over-regulation of Wall Street, suggesting that “our regulatory bodies are often competing to be the toughest cop on the street, the British regulatory body seems to be more collaborative and solutions-oriented.”

Thanks to five years of nonstop fraud investigations in the U.S., we now know that London has been keeping a lot of dirty secrets for the global banks. From Madoff, to AIG, to MF Global, to the London Whale, to Libor, the London-connection has come into play.

And despite that, Schumer is still myopically trying to finish the race to the bottom with London. As recently as July of last year, Schumer was writing to U.S. Treasury Secretary, Jack Lew, in an attempt to derail Gary Gensler, Chair of the Commodity Futures Trading Commission, from imposing cross-border rules to prevent U.S. banks from simply moving their derivative trades to London to escape the stricter U.S. rules that were to take effect.

To take control of the spiraling financial fraud problem, U.S. legislators like Schumer and prosecutors across the pond like the Serious Fraud Office must first accept the unprecedented scope of what unmanageable banking behemoths, deregulation and cross-border regulatory arbitrage have created. No one has said it better than John Mann, member of Parliament, in this exchange with the Chief Executive of the UK’s Financial Conduct Authority, Martin Wheatley, on February 4 during a hearing before Parliament’s Treasury Select Committee:

Mann: “Have we or have we not just had the biggest series of quantifiable wrongdoing in the history of our financial services industry?”

Wheatley: “Yes we have.”

Mann: “Is there any other industry in recorded history in this country who’s had a comparable level of quantifiable wrongdoing to your knowledge?”

Wheatley: “Not to my knowledge. I don’t know what other industries have suffered but certainly not to my knowledge.”

We know with absolute certainty that London’s problem is our problem because that precise exchange would be every bit as true if it occurred today in a U.S. Senate Banking Committee hearing.

Related Articles:

Libor Scandal: The Unvarnished Story of Wall Street’s Heist of the Century

New York Stock Exchange to Take Over Libor: And That’s Supposed to Instill Confidence?

Is the Justice Department Conspiring on the Libor Conspiracy

The Untouchables: PBS Asks Why U.S. Justice Department Isn’t Prosecuting Wall Street

Why Was Libor Rate Rigging Committed Over the Bloomberg Terminal

Barclays Appointed to Review Libor Integrity 90 Days Before It Was Charged With Rigging Libor

Libor Scandal Made Simple: It’s About Illegal Proprietary Trading