Financial Conduct Authority ends iSoft director court battle

Second retrial ruled 'not in the public interest' says financial services authority

Three former iSoft directors have won "not guilty" verdicts in a fight against fraud allegations after the judge said it would take too long to consider all the evidence.

Stephen Graham, Timothy Whiston and John Whelan, former directors of specialist healthcare software firm iSoft, were accused in 2010 by the-then Financial Services Authority (now the Financial Conduct Authority) of conspiring to make misleading statements about iSoft's finances between 2003 and 2006.

A trial in late 2012 resulted in a hung jury, and a retrial was held earlier this year that was also dismissed for reasons that were not permitted to be reported.

Now, after "careful consideration" of the evidence in question, the Financial Conduct Authority (FCA) said today that it has decided a second retrial is not in the public interest and will not be pursued.

According to the FCA, the jury in the retrial was discharged by the judge, Anthony Leonard, QC, following legal argument about the way some of the evidence had been handled – arguing that it would take too long for the jury to consider, which would be "unfair" to the jury.

The judge ruled that the issue did not in itself prevent the case proceeding to the jury, but procedural issues involving the cross examination of counsel for the prosecution meant it would still not be possible to resolve the matter.

Tracey McDermott, director of enforcement and financial crime for the FCA, said she was disappointed with the outcome.

"The problems that have arisen in this case result from a particularly unusual set of circumstances that are unlikely to recur. 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.

The related case against the then-company chairman, Patrick Cryne, which was being tried separately, which will also now not be pursued, the FCA said.

According to a legal review update published by law firm Hogan Lovells, the FSA had queried the defendants' addition of a €54.3m (£46.6m) Irish health service computer system contract.

Although the Irish health board had informed iSoft that it was the preferred bidder for the contract in February 2003, the contract was not signed until April 2005.

The FSA had alleged that the deal was put on the books earlier in order to win more contracts and facilitate merger talks – which the defendants deny. Formal "not guilty" verdicts for all defendants have now been entered – clearing their names, although an order for costs has been made.

iSoft was acquired by CSC in 2011.