News Business Crime & Financial Services 31st Oct 2019

Business Crime & Financial Services Group Newsletter

Welcome to the Autumn 2019 edition of the Business Crime & Financial Services Group Newsletter.

In this edition:

Fiona Robertson considers the Deferred Prosecution Agreement (DPA) entered into by the SFO and Serco Geografix Ltd. This is the first time a parent company has given undertakings in relation to a DPA entered into by one of its subsidiaries.

Lewis MacDonald examines a recent ruling on how the privilege against self-incrimination is applied to documents which exist independently of the will of the subject, distinguishing statements obtained under compulsion from real evidence, and confirming that Article 6 may be violated even in the absence of a criminal charge.

Nikita McNeill writes on the ending of the SFO’s Libor investigation following a seven year probe. She highlights the fact that, following a number of high-profile acquittals, it is significant that the SFO has not said whether it does not have enough evidence to charge any more suspects or whether these trials are considered no longer to be in the public interest.

Narita Bahra QC and Amy Woolfson report on the largely unregulated market of private investigations and reminds lawyers engaging those who provide these services that they should set clear expectations and boundaries, in order to protect themselves.

Gavin Irwin considers the decision in R v S [2019] EWCA Crim 1728, where the Court of Appeal reversed the discharge of a restraint order in a complex money laundering investigation, despite considerable delay in charging the suspects.

Leon Kazakos describes the government’s long-awaited proposed changes to Companies House and its powers and observes that making these changes will require a significant injection of funding.

We hope that you find these articles interesting and stimulating. If you would like to discuss any aspect of them, please feel free to contact the authors directly, or if you have any suggestions for future editions these can be submitted to our Marketing Manager Julia Fox.  Equally, please do forward this newsletter to any colleagues who may be interested. They will be able to subscribe to future editions by clicking here.

With best wishes

Alison Levitt QC

Serious Fraud Office v Serco Geografix Limited [2019] 7 WLUK 45

Fiona Robertson

On 4th July 2019 Mr. Justice Davis approved a Deferred Prosecution Agreement (“DPA”) between the Serious Fraud Office and Serco Geografix Limited  – the fifth DPA to be approved by the courts.

This case reiterates the importance of cooperation and remedial action by companies wishing to enter into a DPA. It is the first occasion on which undertakings have been made by a parent company (Serco Group PLC) in relation to a DPA entered into by one of its subsidiaries (Serco Geografix Ltd). Without the undertakings of the parent company, it is unlikely that the goals of a DPA could have been achieved in the circumstances of this case. This is an important development, as Mr. Justice Davis noted…..

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Article 6 and compulsory production orders: Volaw Trust and Corporate Services Ltd and its Directors and others v The Office of the Comptroller of Taxes and another (Jersey)

Lewis MacDonald

Handed down just before the start of a summer sporting smorgasbord which is still ongoing, some may have missed this important ruling on the application of the privilege against self-incrimination to documents existing independently of the will of the subject. This is every bit as exciting as Ben Stokes at the crease.

The background to this case was that a Jersey company was required to produce certain documents under pain of criminal sanction. Its judicial review citing the privilege against self-incrimination failed at first instance and on appeal in Jersey. It was appealed to the Privy Council.

The decision will have a wide effect in English and ECHR law.

The Privy Council considered the rule in Saunders v UK, and subsequent English authorities such as….

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SFO Shuts Down Investigation into Libor Rigging

Nikita McNeill

On 19 October 2019 the SFO announced that, following a seven-year probe, the Libor investigation would be shut down. It said that:

“Following a thorough investigation and a detailed review of the available evidence, there will be no further charges brought in this case. This decision was taken in line with the test in the Code for Crown Prosecutors.”

Libor is the benchmark interest rate that tracks the cost of borrowing cash. Every day banks estimate what interest rate they think they will have to pay to borrow money, then an average is published as the London Interbank Offered Rate (Libor). £3.5 trillion of investments were tied to Libor. The benchmark has since been overhauled.

The SFO investigation into the alleged manipulation of Libor commenced on 6 July 2012 and is reported to have cost taxpayers at least….

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Corporate Intelligence: Strategic friend or foe?

Narita Bahra QC and Amy Woolfson

The UK has one of the fastest growing markets worldwide for companies offering corporate intelligence and investigations services. These services can provide powerful insights for clients, and help to protect against fraud, corruption, litigation, commercial disruption, and reputational damage. But the market for private investigations is largely unregulated. The recent cases of Neil Gerard and Iqbal Khan illustrate the risks that investigators – and those who instruct them – can be exposed to. What legal and practical issues should those instructing a corporate intelligence service keep firmly in mind?

Corporate intelligence covers a broad swathe of activities. It can range from relatively simple open-source enquiries, such as checks on the Companies House website, to targeted surveillance involving multiple “on the ground” operatives. Many such firms are led and run by those who….

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Investigating complex crime while restraining assets: ‘reasonable time’ v ‘practical realities’

Gavin Irwin

Under section 42(7) of the Proceeds of Crime Act 2002, the court must discharge a restraint order (‘RO’) if, ‘within a reasonable time proceedings for the offence are not started’.

In R v S, the investigation started in May 2016 and by August 2018 an RO was imposed against all the suspect’s assets (although a ‘living expenses’ proviso was included). At that time, a charging decision was ‘expected towards the end of 2018’.  That timescale was not met and, in February 2019, in the financial investigator’s updating witness statement, it was suggested that a charging decision was ‘likely’ by the end of May 2019.  In June 2019, the suspect applied to discharge the RO under section 42(7) and, in July, the application succeeded.  By that time, the investigation was…..

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Corporate Transparency and Register Reform

Leon Kazakos

  1. In May this year the Government (BEIS together with Companies House) opened a consultation into Corporate Transparency and Register Reform, as part of the continuing drive to increase the transparency of UK corporate entities and to help combat the risk of fraud and the misuse of information. The aim is to reduce the risk of fraud and misuse of information, widening the information companies are required to disclose, increasing the checks on this information, and introducing measures to improve the exchange of intelligence between Companies House, law enforcement and HMRC. The consultation canvassed opinion about the following changes to the manner in which Companies House operates, specifically:
  • Introducing verification checks and widening the information that companies are….

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