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FCA ends iSoft accounting fraud court battle

THREE DIRECTORS from IT business iSoft have won “not guilty” verdicts in a fight against fraud allegations after a document was discovered during closing statements.

The Financial Conduct Authority (FCA) dropped its case against Stephen Graham, Timothy Whiston and John Whelan after the discovery of new material while barristers were preparing to give their closing speeches to the jury.

Judge Anthony Leonard, QC, sitting at Southwark Crown Court, said that it would take too long for the jury to consider the new evidence which would be “unfair” and “to throw more money at this issue would be money badly spent.”

After “careful consideration” of the evidence in question, the FCA said it has decided a further retrial is not in the public interest and will not be pursued.

“The problems that have arisen in this case result from a particularly unusual set of circumstances that are unlikely to recur,” said Tracey McDermott, director of enforcement and financial crime at the FCA.

“As with all our cases, win or lose, we will look to see what lessons can be learned for the future. In the meantime, we continue to focus our energy on the strong pipeline of cases we have under investigation,” she said in a press statement.

An earlier trial at the end of 2012 resulted in a hung jury, and a retrial was held earlier this year but was also dismissed for reasons we are not permitted to report.

The trio were accused of conspiring to deceive iSoft’s board, auditors and investors about the company’s financial viability, by prematurely adding revenues from a deal with Irish hospitals.

According to The Times in this latest trial one of the prosecution lawyers discovered an undisclosed document in her files. The judge said that the new material “resulted in the prosecution changing their stance in important aspects of the case”. The defence said it needed time to consider the material but the judge said a delay would be unfair to the jury and dismissed them.

A related case against the then-company chairman, Patrick Cryne, who was reportedly too ill to stand trial with the others, will now also be dropped by the FCA it confirmed.

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