Newsletters Business Crime & Financial Services 18th Oct 2017

The SFO Survives the Latest Political Reshuffle

The Government is beginning the search for a new director of the Serious Fraud Office (SFO) thereby confirming Theresa May’s plan to scrap the white-collar crime authority has been abandoned.

Theresa May had vowed to scrap the SFO as part of plans to improve the UK’s handling of white collar crime if the Conservatives won the General Election in June this year. Following similar threats in 2011 and 2014 Theresa May had proposed to incorporate the SFO into the National Crime Agency (NCA) in an effort to improve intelligence sharing and bolster the investigation of serious fraud, money laundering and financial crime. This followed concerns that the SFO had struggled to prove its worth following botched cases including the Libor rate-fixing scandal and the prosecution of Vincent Tchenguiz.

In a move welcomed by many in the legal profession, the proposals were quietly dropped from the Queen’s Speech in June after the Conservative Government failed to secure a parliamentary majority.

The SFO was created in 1988 in response to a series of City scandals and, unlike the NCA, has investigators and prosecutors under one roof. Concerns had been raised in response to the proposals that the investigation and prosecution of serious fraud requires significant expertise with a detailed understanding of cross border crime and the new corporate offences which the NCA lacked. The NCA has a wider remit than the SFO, namely to fight serious and organised crime including current pressing issues such as human trafficking and cyber crime. The risk of adding the investigation of serious fraud to the remit of an agency with many other priorities could lead to a dilution of the SFO’s concentration of expertise as well as its independence. Indeed, despite its flaws, shared by many Government agencies, the SFO has become increasingly focused in its remit and has had successes, such as the investigation into historic bribery and corruption at Rolls-Royce which resulted in a record settlement. Leading lawyers and anti-corruption campaigners had cautioned against scrapping the SFO on the basis such a move could cause significant disruption to ongoing investigations and damage the UK’s effectiveness in tackling economic crime and cooperating with other agencies.

David Green, the current director, is due to step down in April after six years in charge. The search for a successor to Mr Green is expected to begin in the next few weeks and the new director will take on the SFO’s heavy caseload, which includes probes of Airbus and Rio Tinto and a corporate prosecution of Barclays’ holding company over a loan deal with Qatar. With so many high profile ongoing investigations in appears the SFO is safe, for now, from the latest round of political reshuffling.


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