Looking beyond the surface...

I have hitherto resisted offering any comment on the affair of the NatWest Three, even although the media and the house of commons have been full of sound and fury. At one stage, ludicrously, even the Scottish Executive saw fit to involve itself (here).

But very little has been said about what the Three are alleged to have done. Today this is remedied by The Guardian which reports:

"The charges facing David Bermingham, Giles Darby and Gary Mulgrew go to the heart of the fall of Enron, in which a small number of senior executives were able to hang on to fortunes despite 21,000 people losing their jobs. When it began facing financial difficulties, Enron established a series of off-balance sheet ventures to raise investment and hide losses. NatWest invested in one of these, LJM Cayman. The NatWest three, who worked in the bank's structured finance division, are accused of recommending NatWest sell its stake for $1m - allegedly for far less than it was worth. The buyer was a partnership, Southampton LP, which made a huge gain shortly afterwards by selling the stake on. The British trio, according to the FBI's indictment, were investors in Southampton LP along with Enron's global finance manager, Michael Kopper, who has since pleaded guilty to multiple money laundering and awaits sentence.
When Southampton made its profit, Kopper wired $7.3m from Houston to an account established by Mr Bermingham at a Cayman Islands branch of the Bank of Bermuda. Mr Bermingham divided the money up, wiring $2.38m each into the personal accounts of Mr Darby and Mr Mulgrew and kept the rest himself. They allegedly received the money a week after resigning from NatWest. The trio argue that, although highly unusual, the transaction was entirely legal. They believed NatWest was selling for a fair price and their interest in Southampton LP was disclosed to their employer. The Royal Bank of Scotland, which owns NatWest, has declined to comment. Insiders say the bank is reserving its rights over legal action.
The FBI has seized a series of alleged emails between the trio discussing how they were, in Mr Darby's words, "going to get rich". Mr Bermingham emailed his colleagues apparently discussing the need to keep the deal under wraps: "This is an attempt to head the obvious off at the pass and keep the lid on the thing. Large numbers of people are asking what we are up to. I hate lies." A further alleged email, a month before NatWest sold its stake, predicts a return for "Cayco" of "$7m minimum profit". Mr Mulgrew observes: "It's so much easier to focus when it's your own dough."

A case to answer, perhaps?

And, as a footnote, would RBS (or the Financial Services Authority) have done anything if the Americans had not pursued the matter?