A U.K. judge ordered the acquittal of two former executives of Serco Group PLC after it was revealed at trial that prosecutors had failed to disclose certain materials to the defense.
The U.K.’s Serious Fraud Office, which investigates major white-collar crimes, said on Monday that it wouldn’t offer any evidence against Nicholas Woods and Simon Marshall, the former executives of the government services company, after a review of its disclosure process uncovered the errors.
Judge Amanda Tipples rejected a request by the agency for an adjournment so that it could pursue a retrial, and instead directed a jury to return verdicts of not guilty for Messrs. Woods and Marshall, who had been charged with fraud, the SFO said.
The acquittals, which arose on the third week of a trial that was expected to last for nine, represent a dramatic end to a seven-and-a-half year investigation that surfaced allegations of fraud and false accounting by Serco and another public contractor, G4S PLC.
Serco and G4S subsidiaries previously reached separate settlements with the SFO in which they admitted to misleading the U.K.’s Ministry of Justice about profits from contracts to provide electronic monitoring of prisoners.
Lawyers for Messrs. Woods and Marshall said the SFO’s decision to drop the prosecution was a vindication of their clients, and they questioned the agency’s decision to pursue the case in the first place.
“The fact that the SFO pressed on with its doomed prosecution despite this should be a matter of grave concern for everyone concerned for justice in this country,” Andrew Katzen, a partner at the law firm Hickman & Rose who represents Mr. Woods, said in an emailed statement.
The case’s collapse is likely to raise questions on the agreement Serco struck with the SFO, under which prosecutors agreed to forgo prosecution on condition the company pay a fine and undertake certain reforms.
The settlement, modeled after the deferred prosecution agreements commonly used in the U.S., is still relatively new to the U.K. The country began using them less than a decade ago.
The SFO on several occasions has failed to secure convictions against employees of companies with which it had reached deferred prosecution agreements, causing lawyers for the accused as well as others to question the narrative upon which the settlements were based.
A Serco spokesman declined to comment. In the company’s case, the admitted misconduct occurred between 2010 and 2013. Messrs. Woods and Marshall left the company in 2013.
On Monday, Mr. Katzen pointed to the same discrepancy between his client’s acquittal and the version of events memorialized in Serco’s deferred prosecution agreement.
“A narrative was thus created in which the responsibility of Serco and its senior officials were marginalized, and blame was instead cast on Mr. Woods, a small cog in a big wheel,” Mr. Katzen said.
“It is hard to avoid the conclusion that, once again, the narrative created by the DPA drove this investigation, and did so in defiance of the facts,” he added.
The SFO last year brought charges against three former executives of a G4S subsidiary. The three are awaiting trial. The company previously declined to comment on their prosecution.