Regulatory risk: new SFO Director signals changes in how the agency will treat companies in the future
The Serious Fraud Office has withdrawn its guidance to companies that discover and report corrupt conduct in order to avoid prosecution. The guidance, which had been based upon the US model, was issued in July 2009 by former SFO Director Richard Alderman.
In the three years it was promoted, the guidance lead to a number of self-reports, five of which have concluded. Four of these cases resulted in a non-penal outcome, by way of civil recovery order. In the other, which concerned Mabey & Johnson Ltd, both the company and its directors were prosecuted for corruption. The company paid fines of £3m, made reparations of just over £1.4m and had a confiscation order of £1.1m imposed. This is in addition to paying £350,000 towards the SFO’s costs and £250,000 towards the cost of an independent monitor. The directors were sentenced to prison terms of 21 months and 8 months respectively and were disqualified from being company directors. One of the employees, who became a co-operating witness, received a prison sentence of 8 months suspended for 2 years.
The SFO is reappraising its approach to dealing with corporate hospitality, facilitation payments and self-reporting under anti-bribery powers it was granted last year. Whilst this means continued uncertainty for companies in terms of prosecution policy, there is a lot of other industry specific guidance around upon which policies can be based so as to be proportionate and properly focussed. As long as appropriate measures are taken to assess the risk of corruption, and policies and training are tailored to deal with that risk, companies should not have too much to fear from the withdrawal of the SFO’s guidance. It is still a safe bet that companies will not be prosecuted for technical infringements of the Bribery Act. Indeed, although less in the public spotlight than his predecessor, new director of the SFO David Green has said “We are interested in hearing that a large company has mysteriously come second in bidding for a big contract. The sort of bribery we would be investigating would not be tickets to Wimbledon or bottles of champagne. We are not the “serious champagne office”…
If you are registered and logged in to the site, click on the link below to read the rest of the DLA Piper briefing. If not, please register or sign in with your details below.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
Global Financial Markets Insight — the case for a better-functioning securitisation market; the cost of holding ABS; and more
DLA Piper has released the latest version (issue 4, Q3 2014) of its Global Financial Markets Insight publication.
Corporate Insurance Trends 2014 is a collection of articles highlighting some trends and key issues for financial lines insurers and their insureds in 2014.
Analysis from The Lawyer
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.
A new breed of lawyer is smoothing the path for companies entering emerging or unstable jurisdictions