New Director plans changes at the Serious Fraud Office
A few days ago the new Director of the Serious Fraud Office, David Green QC, used his first public speech at a corporate accountability conference in London organised by the accountancy firm PwC to set out his plans to reconfigure the UK’s leading prosecution agency for serious economic crime. The author was a guest of PwC at this conference which had many high profile speakers and great content throughout the day.
Mr Green told the audience of approximately 200 leading anti-corruption practitioners, at a session chaired by Lord Wolfe:
“I aim to recharge the SFO’s corporate self respect and lead it to the top of its game as a major crime fighting agency”
Mr Green continued to say that he would advertise for four senior roles and this is likely to lead to new officials entering the agency. He is seeking a new chief investigator (to replace Keith McCarthy who left a few months ago to join PwC), a new general counsel (to replace Vivian Robinson QC who left 11 months ago to join the international law firm McGuireWoods), a new head of policy and external affairs and a new role focussing on managing cases between charge and trial. Mr Green said that this latter position would also advise on the suitability of settlements and on American style deferred prosecution agreements (“DPAs”), should they be introduced into law, as is planned by the current government. We have blogged on the subject of DPAs here previously.
Mr Green’s planned restructuring of the agency is partly as a result of a greatly reduced budget, which itself is a consequence of the government’s severe cut backs on public expenditure (the SFO’s budget has gone down from £52 million in 2008 to £32 million in 2012) and also due to the recent severe criticism by Lord Justice John Thomas of the way that the SFO had handled the investigation into and raid on the Tchenguiz brothers. The Judge undertaking the judicial review brought by the Tchenguiz brothers was particularly critical of the outgoing director of the SFO, Richard Alderman.
Mr Green announced at the PwC conference that four teams would be created within the SFO: two teams would oversee fraud cases and two would manage bribery cases; a fifth team would include support functions such as human resources. See the FT.com report here.
Amongst other things revealed by Mr Green at the conference were:
- The Serious Fraud Office should not necessarily be the agency to undertake the prosecution of boiler room scams and mortgage frauds (the implication being that these types of crime be dealt with by other agencies including presumably the Crown Prosecution Service).
- That the Serious Fraud Office may look at alternatives to prosecution (such as civil settlements) but if the SFO does not prosecute, it does not mean that it is a failed investigation.
- That the SFO will expand and develop their investigation capabilities including the use of open source research and SARs (Suspicious Activity Reports).
- Mr Green is keen to recruit solicitors and barristers from the private sector, including through secondments from their employers.
- There would be a renewed focus on training at the SFO.
- The SFO would be collaborative with other agencies, both domestically and internationally.
- Mr Green welcomed the current inspection being undertaken by the Crown Prosecution Service.
- That the SFO would remove income from shareholders for illegally obtained contracts under the Proceeds of Crime Act (“POCA”) (this is a continuation of the new policy brought into force by Mr Green’s predecessor, Richard Alderman, in January 2012 when the SFO made a civil recovery from the shareholders of Mabey & Johnson which itself had previously agreed to a civil settlement order in relation to allegations of corruption.
- In relation to deferred prosecution agreements, Mr Green said:
- That this was a new and imaginative tool for economic crimes committed by commercial organisations;
- That he was looking at how one could prevent corporate defendants from “forum shopping”;
- That sentencing of defendants is solely for the courts to decide and not for prosecutors;
- And that corporations must not be seen to be able to escape from punishment where they had committed a crime.
- Mr Green added that the fact of self reporting is recognised in the public interest limb of deciding whether to prosecute or not. The introduction of DPAs in this context would be very helpful.
- However, information provided to the SFO as a result of self-reporting may be disclosable to international agencies, so corporations may want to seek global settlements of related crimes.
- Ultimately, where it is in the public interest for the SFO to prosecute, it will indeed prosecute.
We look forward to further announcements from the new Director as his reforms at the SFO are put into effect.