Early one July morning in 2016, Robert Bogucki, a senior executive at Barclays PLC, walked into what he expected to be a short meeting with the British bank’s lawyers to go over a five-year-old transaction before he joined his family on vacation.

Instead, he emerged after 11 hours of questions that 18 months later led to his criminal indictment—and ultimately to a trial that would expose some flaws in a broad Justice Department push to police Wall Street that continues to this day.

Mr. Bogucki oversaw over-the-counter foreign exchange trading, including options, a private corner of financial markets used by companies, banks, hedge funds and other sophisticated investors with no regulatory oversight at the time. The DOJ alleged he committed fraud by using a corporate client’s information to make money for the bank at the client’s expense.

Propelling the case was an aggressive DOJ push, starting several years after the 2008 financial crisis, to pursue individual wrongdoing on Wall Street—a response in part to criticism from lawmakers and others that the government’ was too focused on extracting fines from banks without punishing people.

Sally Yates, who became deputy attorney general in 2015, formalized one of the strategies in a memo that year saying companies wouldn’t get full cooperation credit unless they turned over everything they knew about employees’ wrongdoing. Aiming for more lenient treatment for themselves, banks scoured their internal records for evidence of their own employees’ misconduct.

The push carried prosecutors into insular markets dominated by Wall Street middlemen that had not been subject to much regulatory oversight.

Mr. Bogucki was one of the highest-ranking Wall Street executives charged in the effort. The prosecution in his 2019 federal case presented recordings of phone calls, chat messages, and testimony—gained through Barclays’ cooperation—as evidence. Mr. Bogucki (pronounced Bo-GOOT-ski) denied wrongdoing throughout his case.

But the judge dismissed the case without hearing the defense present its evidence, saying the decision to prosecute Mr. Bogucki represented an effort to impose strict rules on a market that had been largely unregulated.

“The government completely overreached,” the judge said as he dismissed the case. At the end of the trial, he said: “Lines have to be very clear, because when somebody crosses a line and is likely to end up in jail, you want that line to be clear.”

A DOJ spokesman said: “No one prosecution—no matter the result—should diminish the strong deterrent message that is sent through the quality and volume of the Fraud Section’s corporate and individual white-collar criminal prosecutions.” Barclays said it “cooperates fully with legal and regulatory authorities…and treats all of its colleagues respectfully and fairly.”

The DOJ push has led to more prosecutions of individuals than previously. Between 2016 and 2020, it prosecuted employees in 37% of 146 cases where companies received leniency through so-called deferred or nonprosecution agreements, according to a Wall Street Journal analysis of data provided by Duke University Law School professor Brandon Garrett. That is up from 28% in 147 cases in the five prior years.

But the cases have been harder to prove than others the DOJ prosecutes. The agency in recent years has won convictions or guilty pleas in about 94% of all criminal proceedings, and 92% of both white collar cases generally and those from the DOJ’s headquarters fraud section, the unit that prosecuted Mr. Bogucki.

Mr. Bogucki in his office at Barclays in 2012.

Mr. Bogucki in his office at Barclays in 2012.

Photo: Robert Bogucki

By contrast, the DOJ’s success rate in the Wall Street cases from across the agency since 2016 is about 79%: It has prevailed against 23 defendants working for banks or broker-dealers, and lost cases against 6 others, according to the Journal’s research. Seven cases are pending.

Some juries and judges in the cases found the DOJ tried to criminalize conduct that looked unseemly but wasn’t illegal. Other judges have faulted prosecutors for co-opting banks to build cases against employees in ways the employees describe as violations of their constitutional right against self-incrimination.

Some of the targeted traders, including Mr. Bogucki, have argued that the incentives forced banks to play an inappropriate role in shaping the evidence that influences whether an individual is criminally charged. In essence, they say, the DOJ push drives companies to do prosecutors’ work, giving a bank the incentive to throw employees under the bus so the bank can limit its own liability.

A federal judge in one case noted in 2019 that an accused trader “made a rather convincing showing” that the bank and its outside law firm “were de facto the Government.” The judge upheld the jury’s conviction but sentenced the trader and a colleague to no jail time and said prosecutors were trying to punish them as a proxy for much wider wrongdoing.

Seth Levine, an attorney who represented clients in two key cases where courts scrutinized the government’s reliance on banks’ investigations, said: “The system of corporate cooperation creates such strong incentives for companies to assist the government with its investigations that it can lead to corporate counsel acting like deputized members of the Department of Justice rather than private defense lawyers.”

Current and former DOJ officials say corporations don’t have any incentive to unnecessarily blame an employee who did nothing wrong. They also say the government conducts its own probes after receiving information from companies’ investigations.

The Justice Department said it “carefully evaluates the decision to pursue charges against individuals and corporate entities in every case.”

The Yates memo

Ms. Yates’s 2015 memo put a fine point on the DOJ’s strategy: Companies wouldn’t get credit for cooperating in a criminal investigation without providing specific information about the individuals involved in the misconduct. DOJ officials complained publicly at the time that too many companies were disclosing misconduct to the government with general descriptions devoid of specifics. The Trump administration largely kept that requirement in place.

“Companies cannot pick and choose what facts to disclose,” she wrote. “To be eligible for any credit for cooperation, the company must identify all individuals involved in or responsible for the misconduct at issue.”

Newly armed with trading records, internal chats and other communications that banks are required to record, the DOJ pursued dozens of cases against Wall Street defendants involving markets that have historically been difficult to police because of their complexity, opacity and private nature.

U.S. Deputy Attorney General Sally Yates testifies during a Senate Judiciary Committee in 2015.

U.S. Deputy Attorney General Sally Yates testifies during a Senate Judiciary Committee in 2015.

Photo: kevin lamarque/Reuters

In a case similar to Mr. Bogucki’s, a federal jury in 2018 convicted a former head of foreign-exchange trading at HSBC Holdings PLC of fraudulently misleading a client about how the bank would execute a large dollar-British pound trade. HSBC declined to comment.

Current and former DOJ officials credit the approach with forcing greater cooperation from banks. “Maybe companies were cooperating 90%, and we wanted them to cooperate 100%,” said Benjamin Singer, a former federal prosecutor who ran the DOJ’s market-integrity and major-frauds unit and is now in private practice. “They collected all the emails, but did they collect all the trader chats, too, did they help point to the key needles in the haystack of evidence?”

Among the push’s failures: A Manhattan federal jury in 2018 acquitted three currency traders of manipulating euro-dollar exchange rates, after their employers pleaded guilty and paid billions of dollars in related criminal penalties, deciding there wasn’t enough evidence they rigged the market.

One of those traders later sued Citigroup Inc., his employer, arguing that the bank tried to limit its liability by helping prosecutors build the case against him by decoding chat-room jargon in misleading ways. A federal judge in March denied Citigroup’s bid to dismiss the lawsuit. A bank spokeswoman said the claims were without merit.

Mr. Bogucki’s case

A 2011 options deal put Mr. Bogucki, now 48, in the DOJ push’s sights. Running Barclays's New York foreign-exchange trading desk at the time, he and his team had helped Hewlett-Packard Co. execute a trade to assist HP’s £6 billion acquisition of Autonomy Corp.

Interviews with people familiar with the investigation and reviews of documents and notes related to it provide a picture of how Mr. Bogucki’s case developed.

Options help a company manage exposure to currency fluctuations. In the 2011 deal, HP had acquired the options, which acted as insurance against the risk of the British pound rising, which would have made the purchase of Autonomy more expensive. When HP decided it didn’t need the insurance, it sold the options back to Barclays. Then, as today, such trades were governed by private contracts that typically allowed each party to act in its own interest.

In 2015, a former Barclays compliance officer went public with concerns about the bank, telling the New York Times that its foreign-exchange traders might have misused confidential information related to the HP deal.

Barclays had pleaded guilty that year, in a separate investigation, to rigging foreign-exchange rates. Barclays’s plea deal gave prosecutors a new avenue to find additional targets in their push to ferret out individual wrongdoing. As part of the plea, the bank agreed to divulge to the government signs of potential fraud it discovered in the future, beyond what it would otherwise be obligated to do.

So when the bank later found audio recordings relevant to the HP deal that its lawyers considered troubling, it was time to turn information over to the DOJ.

Barclays brought in Wall Street law firm Sullivan & Cromwell to help in a review. In May 2016, the law firm’s lawyers including Alex Willscher—one of Barclays's primary attorneys at the firm—along with other bank lawyers, briefed DOJ prosecutors about what they had found.

They described a 2011 call in which Mr. Bogucki and a Barclays trader discussed what appeared to be an episode of “front-running” their client: They talked about how Barclays made £1 million by trading ahead of part of the HP transaction.

Mr. Bogucki said on the call: “The road map to profitability is like this banking deal, where somebody like you pre-positions and makes a million pounds,” using a term for trading in advance to hedge the bank’s exposure. The lawyers provided prosecutors with chat records and call details.

The lawyers hadn’t interviewed Mr. Bogucki in May 2016 about the call but told prosecutors they planned to. That month, a Barclays internal lawyer asked Mr. Bogucki—by then the bank’s global head of trading in interest rates, currencies and commodities—to meet with Sullivan & Cromwell two months later.

The offices of banking giants HSBC and Barclays in London.

The offices of banking giants HSBC and Barclays in London.

Photo: tolga akmen/Agence France-Presse/Getty Images

A Sullivan & Cromwell spokesman said that “we assisted our client Barclays in complying with its reporting and cooperation obligations to the Department of Justice...Our lawyers conducted themselves fairly, ethically, and transparently with all parties, and any suggestion to the contrary is simply wrong.”

Over the next two months before the interview, Mr. Bogucki reviewed the phone call and other evidence with a lawyer Barclays hired. He told his lawyer he viewed the evidence as normal activity conducted by the bank to hedge its risk.

On July 11, Mr. Bogucki walked from his Upper East Side apartment to Sullivan & Cromwell’s conference center. He and his lawyer, Amy Millard, faced a half-dozen lawyers including Sullivan & Cromwell’s Mr. Willscher, who disclosed that his firm represented Barclays in an internal investigation and that the information obtained could be shared with outside authorities.

Outside lawyers conducting companies’ internal investigations must under ethics rules disclose in employee interviews that information might be shared with the government or other third parties, but not which specific agencies.

Mr. Bogucki later said in an ethics complaint that Ms. Millard hadn’t told him about the criminal interest in the inquiry before the interview and understood it to be of potential interest only to regulators, which lawyers involved in the investigation disputed. Ms. Millard said Mr. Bogucki’s claims were “absolutely untrue,” but declined to further comment.

The New York state court’s disciplinary committee said in December it would take no action on the claims. Mr. Bogucki has appealed the decision.

In one call they discussed, recorded as HP prepared to sell the options back, a London trader told Mr. Bogucki: “I was going to call out tomorrow morning and basically bash the shit out of this again.” The implication that prosecutors later alleged: Barclays traded in advance to push down prices so it could buy the options at a lower price from HP.

Mr. Bogucki told the lawyers he thought the comment was “garbage trader speak” that signified he was trying to unload some of the risk Barclays assumed after it had bought a first batch of the options.

At 8 p.m., Mr. Bogucki left the interview and drove to Long Island to join his family vacation. That November, Barclays put Mr. Bogucki on paid leave, and its lawyers continued to hand evidence to the DOJ.

Mr. Willscher and his colleagues advised DOJ prosecutors that the trading didn’t look like fraud and that they would have trouble proving their theory at trial, people familiar with the communications said.

The prosecutors pressed ahead, and a federal grand jury in San Francisco indicted Mr. Bogucki in January 2018 on wire fraud and other charges. The indictment didn’t mention the call that sparked Mr. Bogucki’s interview, but it did note other statements by him on recorded phone lines and in electronic chats.

The prosecutors sought to show that Mr. Bogucki lied to HP and breached a duty of trust. The indictment quoted Mr. Bogucki telling a trader by phone: “If it gets back to HP by some loose lipped market monger…that we’re selling cable off of them…it will go straight to [the head of Barclays's U.S. operations] and your ass will be in a f— frying pan in November.” (Cable is a term for the dollar-sterling exchange rate.)

Mr. Bogucki’s lawyers argued that prosecutors had mis-transcribed that quote.

A month after Mr. Bogucki’s indictment, prosecutors sent Mr. Willscher a letter with an update: While the DOJ had found that Barclays had misappropriated information from HP and would prosecute Mr. Bogucki for it, the agency would close its investigation into Barclays because of the banks’ full cooperation, including the bank’s “provision of all known relevant facts about the individuals involved.”

Weeks later, a DOJ official praised the outcome at an industry conference, saying it was the first time the agency had declined to prosecute a company in a non-corruption case as a reward for self-reporting potential misconduct, fixing problems and giving back profits.

In Mr. Bogucki’s 2019 trial before Judge Charles Breyer in U.S. District Court in San Francisco, flaws in the government’s case soon appeared. The star witness, HP Treasurer Zac Nesper, acknowledged he withheld important information from Barclays and sometimes was “BS-ing” the bank when he negotiated with its traders.

Hewlett Packard Enterprise Co. and HP Inc., descendants of HP, declined to comment. Mr. Nesper didn’t respond to requests for comment.

The defense brought a “Rule 29” motion—the number of the rule in the federal rules of criminal procedure—asking the judge for a dismissal before the defense presented, arguing the government hadn’t proven its case.

Judge Breyer granted it in March 2019—the first time he had dismissed an entire case before it went to the jury in his more than 20 years on the bench. The deal boiled down to a tough negotiation between savvy parties, he said, and “there was no expectation of full disclosure.”

As Judge Breyer delivered his ruling, one of Mr. Bogucki’s lawyers scrawled a note that she slid to him: “Over Forever.”

Mr. Bogucki filed claims against Barclays related to his suspension and lost earnings, which the bank settled for an undisclosed sum last May. He bought a new boat and named it “Rule 29.”

Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com and Dave Michaels at dave.michaels@wsj.com