U.K.'s Serious Fraud Office Drops Case Against Olympus

Britain's Serious Fraud Office has dropped its two-year case against Japan's Olympus Corporation and U.K. subsidiary Gyrus Group Ltd., which it had charged with making misleading statements to auditors.

At a court hearing on Tuesday the SFO, which has been taking advice this year on its prospects of prosecuting the firms, offered no further evidence, effectively ending the case.

The decision is a blow for the SFO, which has come under heavy criticism in recent years but which scored high-profile wins when former bank trader Tom Hayes was sentenced to 14 years in prison in August, when hedge-fund manager Magnus Peterson was sentenced to 13 years in jail in January, and in December, when the former chief executive of retailer JJB Sports and two others were sentenced to a total of seven years.

Olympus's high-profile accounting scandal was exposed in 2011, after CEO Michael Woodford—the camera and medical device maker's first foreign leader—was ousted for questioning the firm's past acquisitions. These were later revealed to be part of a plan to conceal about $1.7 billion in investment losses.

Mr. Woodford referred the case later in 2011 to Britain's SFO, which brought charges in September 2013.

Olympus said in a news release on Tuesday that both it and Gyrus, which it bought in 2008, "cooperated fully" with the SFO investigation but didn't accept that the offenses with which they were charged could be brought against them.

The SFO's decision to offer no evidence came after a judge ruled in December last year that English law doesn't criminalize the misleading of auditors by the company under audit, the SFO said in a news release.

In 2013 a Japanese court handed suspended jail sentences to three former Olympus executives for engineering the plan to hide past losses, while the firm has also been hit with millions of dollars in penalties by courts and regulators. In 2013 Olympus agreed to pay $2.6 million to settle a U.S. investor lawsuit.

Write to Laurence Fletcher at laurence.fletcher@wsj.com

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(END) Dow Jones Newswires

November 10, 2015 09:45 ET (14:45 GMT)

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