SFO drops probe into Iceland's Kaupthing The UK's main fraud-busting agency has dropped its high-profile investigation into the collapse of Kaupthing, the Icelandic bank, and shut its case against Robert Tchenguiz, the property entrepreneur. The Serious Fraud Office is expected to make an official announcement later on Monday confirming that it has terminated the probe. The decision comes less than a month after it released Mr Tchenguiz from police bail and marks the closing of an investigation that has caused the agency immense reputational damage. Mr Tchenguiz was arrested during a series of high-profile dawn raids in March 2011, which also saw his older brother Vincent taken into police custody. The arrests of the brothers, both of whom were closely involved with Kaupthing, formed the centrepiece of the SFO's investigation into the collapse of the Icelandic banking system. The case against Vincent unwound earlier this year after the SFO was forced into making a series of concessions about having misunderstood evidence used to obtain search warrants against him. However, the investigation into Robert was kept open and, in July following the judicial review into the legality of the search warrants, the SFO vowed to pursue the Kaupthing investigation with "renewed vigour." David Green, SFO director, inherited the Tchenguiz case from his predecessor, Richard Alderman, when he started at the SFO in April. Mr Green dropped Vincent, Mr Tchenguiz's older brother, as a suspect on the first day of a legal challenge of the agency by the brothers, but the SFO said after the judicial review decision in July that it would pursue the Kaupthing investigation with "renewed vigour." Evidence heard during the judicial review crystallised wider concerns about the SFO's ability to investigate complex economic crime and led to one of the presiding judges, Sir John Thomas, to urge more funding for the agency, which has seen its budget plummet from £52m in 2008 to £32m this year. Mr Green secured an extra £3m from the Treasury in July when he reversed Mr Alderman's decision to not have the SFO investigate the attempted manipulation of Libor and other key benchmark rates. Robert Tchenguiz could not immediately be reached for comment.