EDITORIAL: WHAT'S HOT IN UK CORPORATE FINANCIAL CRIME ENFORCEMENT?

Despite an apparently quiet period, the Serious Fraud Office (SFO) continues to pursue criminal activity, and there are a number of other highly active agencies, each with wide-ranging and increasing powers, that can sometimes be overlooked by directors and compliance teams assessing the risks to themselves and their businesses.

A new three-part video series from Latham & Watkins LLP London partner Stuart Alford KC speaks with Clare Sibson KC, a leading barrister at Fountain Court Chambers, about current trends in UK financial crime enforcement, the personal liabilities of directors, and what company boards should be considering with the evolving expectations for self-reporting. Clare brings a perspective working on these issues once things have got into investigation and prosecution, and Stuart’s perspective comes from advising companies on their internal processes and decisions before it reaches that stage.

In the first of the videos, which we are releasing this month, Clare points out that, despite there being signs that the SFO is undergoing a troubled time and is not undertaking as many prosecutions as they have done in the past, they are not the only enforcement agency in town. There’s also the Financial Conduct Authority (FCA), the Crown Prosecution Service (CPS), the Financial Reporting Council (FRC) and increasingly the Insolvency Service and Companies House to worry about too. And even though the SFO may be going through a quieter period, in the last 12 months alone it has seen a £77 million fine imposed against Petrofac for failing to prevent bribery, and very recently accepted guilty pleas on corruption charges from the Glencore Group who were fined over £270 million pounds by the Court.

Clare and Stuart also point out that it isn’t the SFO as it is currently constituted that will look into financial irregularities, the Financial Crisis took place in 2008 but the first prosecutions didn’t take place till 2014, at least 6 years after the misconduct occurred.

Two further videos in the series will be released in the March and April issues of our newsletter. In those, Clare and Stuart look at the personal liabilities that director face when fraud or other criminal activity is uncovered within their company, including some of the new ways that individuals are being held accountable. The final video looks at the critical decision directors have to make about whether to report or investigate a corporate crime and looks at the evolving expectations for self-reporting and the implications for directors in the future.

The videos are only short and are well worth directors looking at. We are delighted to announce that on 3rd May we will be hosting a NED Conversations with Latham & Watkins to look at the whole issue of financial crime enforcement, so please make a note of the date in your diaries. This is an issue that is much too important to ignore.