David Green CB QC, The Director of the Serious Fraud Office (“the SFO”), recently published his annual report (2014-2015), which can be found here. The SFO acts as an independent governmental authority tasked with investigating and prosecuting the most serious or complex fraud and domestic and overseas corruption under the UK Bribery Act 2010. Domestic bribery cases at the lower end of the scale are handled by the UK’s Crown Prosecution Service and we have previously reported on their activities in this field, which can be found here.
Highlights of the report are that 16 new investigations were started, including into some big name businesses, and that the conviction rate was 78% by defendant (for the last reporting period it was 85%) with 18 defendants (for the last reporting period it was 11) in 9 cases having been successfully prosecuted. The Director comments that “Reflecting our strategic focus, numbers may appear small, but the cases are very substantial” and he refers in this regard to the Innospec and Smith & Ouzman cases that both involved foreign bribery. We reported on Smith & Ouzman here.
This period was significant in that it saw the first convictions under the UK Bribery Act 2010 in the Sustainable AgroEnergy case, which we reported on here, and also a guilty plea in the complex Libor investigation, and a conviction in the Weavering Capital Hedge Fund Fraud. We looked at progress in the Libor investigations earlier in the year and our report then can be found here. In fact since the SFO published its report it has had more success in its Libor investigation with former trader Tom Hayes being sentenced to 14 years in jail after becoming the first person to be convicted by a jury of rigging the Libor interest rate.
As with last year’s prosecution and conviction figures, the numbers remain small, but set against the magnitude and complexity of the SFO’s work this can still be regarded as a modest success.
Unlike the last reporting period where there had been information security incidents which had to be reported to the UK’s data protection regulator the Information Commissioner, for this reporting period there were no such incidents.
Also of note is the fact that in July 2014 the SFO settled a civil damages claim in an investigation concerning the Tchenguiz brothers, with payments made of UK £3 million and UK £1.5 million, along with various significant costs that are continuing to be settled.
Looking to the future, some 30 defendants in 7 cases have been charged and are awaiting trial, including 12 defendants in the Libor matter. The SFO’s investigatory activity also continues. In a recent letter to a newspaper the Director also made it clear that corporates were still very much in his sights and he specifically mentioned ongoing SFO investigations into GSK, Rolls Royce, Barclays Bank and Tesco although no charges have yet been brought in any of these investigations.
What many are still watching to see develop is the use of Deferred Prosecution Agreements (“DPAs”) that came into operation earlier last year. DPAs are a tool for the SFO (and other government crime authorities) to try and reach a form of plea bargain with corporate offenders and thereby shortcut trials, time and cost. The Director states that the SFO is “actively considering the possibility of [DPAs] in a number of cases, and [he is] confident that this new tool will make a real difference in the SFO’s dealings with cooperative corporates”. There are continuing rumours of possible forthcoming developments in this field, but, for the moment at least, it is still a case of wait and see.
We reported last year here on the previous SFO annual report.
Cordery are experienced in investigating and advising on bribery and corruption matters. Our work also includes providing training and preparing policies and procedures for companies to help them comply with UK bribery laws. More details on this can be found here.
Jonathan Armstrong & André Bywater are lawyers with Cordery in London where their focus is on compliance issues.
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André Bywater Cordery, Lexis House, 30 Farringdon Street, London, EC4A 4HH
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