FCA abandons iSoft4 legal action

The Financial Conduct Authority has announced that it will not pursue a third trial against three former directors of iSoft or seek the trial of the company’s former chair, Patrick Cryne.

In a statement posted on its website, the FCA says that “after much careful consideration of the options available” it had decided that it would not be in the public interest for the trials to be pursued.

The three former directors – Stephen Graham, Timothy Whiston and John Whelan – were tried at Southwark Crown Court last year on charges that they conspired to deceive the stock market about the success of the company as it sought to win contracts in the early years of NPfIT.

The trial collapsed after the jury failed to reach a verdict. The three faced a second trial at the same court this summer, but it collapsed earlier this month.

In its statement, the FCA said this was because of an “exhibit handling issue that arose late in the trial” – relating to a note that had not been seen by the defence. Cryne was not before the court on either occasion for health reasons.

Tracey McDermott, director of enforcement and financial crime at the FCA, which took over the prosecution when it was created in April this year, described the result as a “disappointing outcome.”

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

The protracted investigations and legal action have proved costly. Estimates of the cost of the two trials have reached £5m, and the authority will now be responsible for the defendants’ legal costs.

All four men have always denied the charges. ISoft’s former chief operating officer, Stephen Graham, told the Guardian newspaper that his life had been on hold since the former Financial Services Authority first started an investigation in 2006.

Over this period, he told the paper, “I have had to stand by and watch the company I dedicated 20 years of my life to creating systematically managed out of existence.”

ISoft has been sold twice since the events that formed the basis of the court cases, and is now part of CSC’s healthcare group.

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