Sunday, March 9, 2014 4:47
It all ‘depends’… Advocate or negotiate under broad new sentencing guidelines or pay the consequences.
New rules for sentencing corporates for Fraud, Bribery and Money Laundering are billed as being the 'Definitive Guide' and lay out a five step process. Yet closer examination of the guidelines may make cynics wonder if they are any guide at all when it comes to the final number. Five steps to sticking a finger in the air? Step one The court must consider compensation. Step two The court must consider confiscation under the English money laundering laws. Confiscation must be dealt with before, and taken into account, any other fine or financial order (excluding compensation). Step three The court must consider first, culpability and second, harm. Culpability is split into three levels, high, medium and lesser. Each of these mostly follow the pattern you would expect. Wilful obstruction of detection - for example destroying evidence, misleading investigators and encouraging employees to give false accounts all place corporates into the high culpability camp. Corruption of local or national government officials or ministers ...
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- Incentivise companies NOT to bribe.
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BREAKING: Merry Christmas: Financial Conduct Authority fines insurance broker £1.8 million for anti-bribery systems failings
In a press release this morning the Financial Conduct Authority published details of its enforcement action against a London based insurance broker. The action underscores, again if it were necessary the importance attached by the Financial Conduct Authority to financial crime systems and controls for authorised firms and their resolve to sanction firms for perceived failings. The FCA press release said: "The Financial Conduct Authority (FCA) has fined JLT Specialty Limited (JLTSL) over £1.8million for failing to have in place appropriate checks and controls to guard against the risk of bribery or corruption when making payments to overseas third parties. JLTSL, which provides insurance broking and risk management services, was found to have failed to conduct proper due diligence before entering into a relationship with partners in other countries who helped JLTSL secure new business, known as overseas introducers. JLTSL also did not adequately assess the potential risk of new insurance business secured through ...
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- Construction Industry Public Enemy No.1 for SFO in Sector Sweep announcement
- Half UK Construction Industry say bribery is common in damming report written by…the Construction Industry body
News & what’s on
Speaking last week David Green, Director of the Serious Fraud Office reinforced the message that the SFO will not follow in the footsteps of the US in offering advice or guidance when it comes to compliance. Speaking at a conference organized by PWC he said: “The question I am asked to address presupposes that it is the function of law enforcement to define a good ethical business culture and to educate people towards that goal. That expectation causes me some problems. The role of the SFO is to investigate and to prosecute the topmost tier of serious and complex fraud and bribery… …We totally get the importance of generating trust and, in the right circumstances, legitimate expectation based on a track record of our dealings with companies who self-report. But the SFO is not a regulator, an educator, an advisor, a confessor, or an apologist. I am not funded for any of those activities. The SFO is ...
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- Good news: SFO goes cap in hand again for money.
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Bribery Act & Proceeds of Crime
“Cooperation, Cooperation, Cooperation” is the SFO’s message to corporates looking to enter into new US-style plea bargains available from next week From Monday next week the Americanisation of corporate crime in England continues. Businesses (but not individuals) will be able to enter into Deferred Prosecution Agreements (DPAs) with the UK taking a leaf out of the US book as it moves to plea bargains for corporates. Historically plea bargains have been prohibited and frowned upon in the UK. This judicial perspective was set against a backdrop of: if you can't do the time then don't do the crime. On paper this looks good. But in practice the public interest in prosecuting corporates is often less black and white. The use of Deferred Prosecution Agreements in the US took off after the Arthur Andersen collapse following its indictment (and subsequent conviction). Later and less widely known the Andersen conviction was overturned on appeal. But it was too late. The ...
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- YES, YES, YES, YEEES, YEEEEES, YEEEEESSSSS. But. SFO Director repeats benefits of Self Reporting. Again.
- Opinion: All hat & no cows? Not quite. HALF of SFO resources now devoted to corruption cases.
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Your Questions: Answered
Dear Barry & Richard, Will my company and my Board of Directors likely be prosecuted if they buy another company which has problems after doing limited due diligence? My company is considering buying a business. Unfortunately, we are unable to do much due diligence in advance of the sale as we will have to buy in an auction. The seller, has various interested potential purchasers, and has set up a data room. There is limited opportunity to ask more questions and anyway the deal must be done in a couple of weeks. We don't have much time to do any meaningful due diligence. Barry & Richard answer What you describe is a common problem. We are frequently asked to help businesses in similar circumstances to your own. As you say there is a limit to the due diligence that you can do in cases like this. Under the old Director of the SFO there was ...
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