Posted on June 9, 2011 by Rosanne Kay

UK's Serious Fraud Office survives - but for how long?

This post was written by Simon D. Hart.

After months of speculation, and rumoured turf wars within the UK government, it has today been confirmed that the UK’s Serious Fraud Office (“SFO”) will not be broken up and will remain independent of the new National Crime Agency (“NCA”). The SFO will retain both its investigative and prosecution powers in relation to major economic fraud and corruption. Crucially for the SFO, this means it retains control of investigations and prosecutions under the new Bribery Act 2010 which comes into force on 1 July.

There had been considerable speculation that the SFO would be broken up with its investigative powers being folded into the new NCA and its prosecution powers being passed to the existing Crown Prosecution Service. Richard Alderman, the director of the SFO, had been arguing strongly that the way to tackle serious fraud and advance the anti-corruption agenda was for there to continue to be a single, specialised unit which had both investigative and prosecution powers. He appears to have won that battle – but perhaps not the war. The sting in the tail of today’s announcement is that the government has left open the prospect of the future of the SFO being reviewed one year after the NCA becomes operational in 2013.

The recent uncertainty over the future of the SFO has given rise to the departures of a significant number of senior personnel from the organisation. Whilst today’s announcement means the SFO will survive in its current form for now, the fact that it may only be a stay of execution is unlikely to assist the SFO in recruiting the investigators and prosecutors it now needs to deal with complex and high value fraud and corruption.
 

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Posted on January 20, 2011 by Rosanne Kay

Proposed restructuring of UK agencies dealing with economic crime and fraud continues at pace

This post was written by Simon Hart and Tom Webley.

In advance of the much anticipated consultation in the United Kingdom on the creation of the proposed Economic Crime Agency (“ECA”), which is due to take place this spring, the Home Office announced this week that it plans to take a greater role in the fight against economic crime by having the ECA fall within its remit rather than that of the Treasury. On 17 January 2011 it set out plans to merge the Serious Fraud Office (“SFO”) into the soon-to-be-formed, all-powerful National Crime Agency (“NCA”). It also suggested that the ECA could become part of the NCA.

When it was originally proposed in July 2010, the NCA was heralded as a way to build on the powers of the existing Serious Organised Crime Agency and other law enforcement agencies to tackle serious organised crime and strengthen border security. The ECA, operating separately, was to be given the combined powers of criminal prosecution of the Office of Fair Trading (“OFT”), the SFO and the Financial Services Authority (“FSA”). This would include the FSA’s power to bring prosecutions for insider dealing and market abuse. What was left of the FSA’s powers were to go to its successor- the Consumer Protection and Markets Authority (“CPMA”). 

Reform of the regulatory system for financial services and the structure of the agencies which fight serious economic crime has for some time been a key issue for the Coalition government. In a speech in June 2010, the Chancellor of the Exchequer, George Osborne, reiterated a pledge that the ECA would be set up to end the multi-agency approach to the policing and prosecution of economic crime. However, warnings of the dangers of separating civil enforcement from criminal prosecutions in the context of the financial markets have been heeded and the government accepted that the FSA and its successor, the CPMA, should keep its ability to police insider dealing. This stripped the ECA of some of its proposed powers before it had even come into existence. 

Having already lost its powers of criminal prosecutions over market insider trading, and with a proposal that the SFO be merged into the NCA, the remit of the proposed ECA is narrowing, left as it will be with only the OFT’s powers of criminal enforcement. Questions are being raised about the viability of the ECA as a strong and powerful prosecuting body. We will report further once the consultation is underway. 
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