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Another Senior Criminal Lawyer joins Lewis Nedas Law

lewis nedas new staff femaleWe are delighted that Sue Staveley has agreed to join us as a consultant solicitor.

Ms Staveley is well known within the legal community in London, having run her own highly succesful and respected practice in West London, she also sat as a Deputy District Judge for many years.

Sue also currently sits as a GMC (General Medical Council) disciplinary panel member.

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Another Award for Lewis Nedas Law Corporate Crime Lawyers

Corporate livewire award winWe are thrilled to learn that we have won this years Corporate Live Wire award for Corporate Criminal Law Firm of the Year - UK 2016.


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Risky Business - US Consider Banning Incentive-Based Pay to Rein in Risk Taking

One of the contributing factors to the financial crisis was the excessive level of risk banks and other financial institutions were willing to take, in order to reap the rewards offered to individuals as part of incentive-based pay packages. However, this could be coming to an end in order to create greater long-term economic stability. Financial industry regulators in the US have now invited comment on a proposal which would implement Section 956 of the Dodd-Frank Act, and also amend compensation structures and bank incentive schemes. But how will this rule work, and will it lead to better-behaved banking?

End of Incentive- Based Pay in Financial Institutions?

The newly proposed rule is actually a revision of a rule put forward in Aprill 2011. The rule was developed by six federal regulatory agencies in the US : the Office of the Comptroller of the Currency, the FDIC, the Federal Reserve Board, the Federal Housing Finance Agency (FHFA), the SEC, and the National Credit Union Administration (NCUA).

The rule implements Section 956 of the Dodd-Frank Act, which requires that federal regulating agencies issue together guidelines -

 (1) prohibiting incentive-based payment arrangements that the Agencies determine encourage inappropriate risks by certain financial institutions by providing excessive compensation or that could lead to material financial loss;

(2) requiring those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate Federal regulator

Under the Dodd-Frank act, the law will apply to institutions which have $1 billion or more in assets, and are one of the following:

Fannie Mae (Federal National Mortgage Association) 

Freddie Mac (Federal Home Loan Mortgage Corporation)

  • Depository institutions or depository institution holding companies
  • Investment advisers
  • Broker-dealers registered under section 15 of the Securities Exchange Act of 1934
  • Credit unions
  • Any other institution the regulators jointly decide should be caught under the law

Comptroller of the Currency Thomas J. Curry said:

“By requiring proper alignment of compensation incentives with an organisation’s risk appetite, the rule calls on lending officers and other employees to put the interests of their institution above their own, The rule will play an important role in helping safeguard financial institutions against practices that threaten safety and soundness, or could lead to material financial loss for the institution.”

Will the proposed rule be effective?

The incentive-based compensation rule is designed to ensure that those working in the financial sector are not being incentivized to take action that requires a great deal of risk or unnecessary risk. Initially, for banks with assets of $1-$50 billion, incentive schemes will need to be reviewed and adjusted to ensure that pay is not greatly aligned with factors that lead to risk-taking.

Banks with over $50 billion in assets, will feel the biggest strain as executives may have to defer 50 percent of their incentive-based compensation for up to three years. This system is designed to assist executives in considering longer term goals as opposed to making decisions that will affect their short-term finances.

Representatives from come of the largest financial organisations JPMorgan Chase, Citigroup, and Bank of America declined to comment on the proposals. Furthermore, analysts of the industry have doubts about how effective the implementation fo these new rules will be.

Some industry analysts were not too sure about how effective the rule will actually be. Eric Chader, SVP of the business advisory firm The Collingwood Group said:

“This rule has the 'Duh' factor of ATR (Ability to Repay) by requiring corporate boards to 'conduct oversight' of the incentive-based compensation programs for its executives and significant risk-takers,”

“The risk, however, appears to be a pass-through to those executives, who are subject to clawbacks, deferrals, and forfeitures within the plans that had been approved by a compensation committee to begin with. This seems like misplaced accountability to me. Applied across all financial institutions, it probably won't have the effect of shrinking the talent pool for executive positions—there are many other more substantial risks for potential candidates that would do that—like putting executives at the GSEs on the GS scale.”

Taking into account this opinion it seems as if incentive based schemes already benefit from a stringent framework, where those executives in positions with great ability to take risk are subject to stricter rules. However, the proposals may send a message to executives about the appropriateness of risk-taking more generally following the economic downturn.

It will be interesting to see whether the proposals for kerbing incentive-based compensation schemes will have an impact on business in the UK, and also whether US companies operating in the UK will be subject to similar rules internally.

Contact our Financial and White Collar Crime Lawyers in Central London, North London

At Lewis Nedas, we have a specialist team of lawyers who are routinely sought to advise on the rules applicable to banks and bankers in the UK. Our solicitors are highly experienced in assisting both individual and institutional clients that are facing investigations by the FCA on allegations of market manipulation. Our service places the needs of our clients at its core. We will handle every aspect of your dealings with regulatory bodies: our team will advise on how best to facilitate regulatory requirements; we will represent your interests in any negotiation or court appearances, and provide you with practical advice that has been tailored to reflect your circumstances. At Lewis Nedas we have a thorough appreciation of the law and how it applies to those working in financial services. We pride ourselves on being the trusted advisor to many working in this complicated and demanding sphere, where the rules are often difficult to understand. If you are concerned about the law or are perhaps involved with the FCA already, contact our team today

To speak to one of our solicitors, please telephone us on 020 3131 5891 or complete our online enquiry form.

With offices in Camden and Fleet Street, we represent and advise businesses in Central London, West London, North London and across the UK.


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Corporate Offence of ‘Failure to Prevent’ to be Broadened

The Ministry of Justice has outlined plans to consult on expanding the criminal corporate offence of ‘failing to prevent’ beyond its current scope of bribery and more recently tax evasion, to include other economic activities amounting to criminal conduct.

Justice Minister, Dominic Raab said:

‘The government is finding new ways to tackle economic crime and we are taking a rigorous and robust approach to corporations that fail to prevent bribery or allow the tax evasion on their behalf.

We now want to carefully consider whether the evidence justifies any further extension of this model to other areas of economic crime so that large corporations are properly held to account.”

The consultation to be published this summer is seeking opinion on whether changes in the law could assist authorities in bringing those committing corporate offences to justice. At present, the police and other law enforcement agencies find it difficult to prosecute companies for accounting offences, money laundering and fraud under the current legal framework. The failure to prevent model will be introduced to compliment and work alongside the existing regulatory and legal framework. But how might the law work? This post looks at both the Bribery Act and the proposed tax evasion laws to assess how the laws might work, and what businesses can be doing to prepare for such changes.

Failure to Prevent Bribery

The prime example of the ‘failure to prevent’ corporate offence is in relation to bribery.

The Bribery Act 2010 creates a strict liability offence for failure to prevent bribery. An organisation will be held liable for the actions of any person carrying out services for the business, regardless of in what capacity they are carrying out these services. The broad drafting of the law means that it will catch contractors, agents and even subsidiary companies. In addition, where the organisational failures to prevent bribery arise out of the consent or actions of senior officers of the company, they may also be liable for an offence under the Act. Where an organisation is charged with an offence under the Bribery Act, the only defence to the charge is that the organisation had put in place adequate procedures to prevent it. Where an organisation has implements procedures to prevent bribery, it may be able to escape liability for bribery offences.

This aspect of the legislation has had a significant impact on commercial organisations as they now must ensure they have properly developed and implemented policies and procedures to prevent bribery. Organisations have also had to review the way in which the approach hospitality, gifts and donations so as not to be caught by the bribery legislation. Businesses and organisations may have to look at a number of their other policies and procedures if the scope of ‘failure to prevent’ is broadened, including looking at methods for preventing money laundering, fraud and accounting.

The Bribery Act has extra-territorial reach in that it catches actions of employees of overseas subsidiaries, agents or contractors of a UK company and the corruption itself does not need to take place on UK soil. Overseas companies may also be caught if they have a significant connection with the UK.

Failure to Prevent Tax Evasion

The statement comes just after the Prime Minister has announced that he will introduce a criminal offence applying to corporations who fail to prevent their staff from facilitating tax evasion.

The new criminal offence of “corporate failure to prevent tax evasion or the facilitation of tax evasion” is targeted at businesses. Although the obvious targets are banks, fiduciaries and professional services firms, it looks as if it will apply to all businesses. Going forward businesses will have to pay greater attention to the activities of their employees, contractors, suppliers and customers in relation to tax.

If, as seems likely, the tax offence applies in a similar way, companies and other businesses will also need to have robust procedures in place to prevent their employees, service providers, agents, and associates from engaging in or facilitating tax evasion. Depending on the scope of the offence this could be wide ranging. All business will have to determine how this might apply to them and implement bespoke policies and procedures.

Moreover, the penalties for individuals who seek to evade tax are to become tougher, and a strict liability offence is to be introduced. The Chief Secretary stated, “if you help someone to evade tax of £1m, you can expect to pay a penalty of £1m or more”.

Broadening Failure to Prevent

The proposals to broaden the failure to prevent doctrine to a number of different financial crimes could have important implications for all businesses. Businesses will need to look more closely at relationships with suppliers, contractors and employees as well as implementing new systems for the way goods and services are paid for in the course of business. This will also mean business will need to look at training staff and ensuring all employees fully understand their obligations under the law. It is anticipated that in a similar way to the Bribery Act, the only defence to failure to prevent will be to prove that adequate measures have been taken to prevent the offence taking place.

Contact our Financial/White Collar Crime Lawyers in Central London, North London

The team at Lewis Nedas are among the UK’s most experienced criminal lawyers, who have been advising on the law as it applies to clients operating in financial services for many years. If you need a legal team who is acutely aware of the requirements imposed on you and your business, and who can provide practical solutions to satisfy regulatory concerns, contact the financial regulatory defence team at Lewis Nedas.

To speak to one of our solicitors, please telephone us on 020 3131 0867 or complete our online enquiry form.

With offices in Camden and Fleet Street, we represent and advise businesses in Central London, West London, North London and across the UK.


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More Successes for Lewis Nedas Law criminal clients

  1. cuffsIn a recent case Keith Wood, working with Sam Stein QC, secured an outstanding result for an Ex trading company director. Having pleaded guilty to a very serious assault after careful deliberations and analysis of CCTV, an extensive package of references and reports was put forward to the court which resulted in the judge passing a suspended sentence. The judge commented “You are skating on very thin ice and you have very nearly fallen through, but not quite, due to the way in which your Counsel has put forward your mitigation today". 
  2. Crown offer no evidence; Our client EC was awaiting trial at Southwark Crown Court having been charged with sexually touching two Japanese student tourists on a crowded Victoria line train. However neither complainant was willing to give evidence even by video link and hence following a hearing on 14th June the prosecution was dropped. In this matter EC was represented by Tony Meisels, and Dee Connolly of 33 Bedford Row.
  3. No further action taken in date rape case; Tony Meisels represented JG who was interviewed under caution after a woman he met on Happn accused him of raping her on their first and only date. JG maintained that only consensual sexual intercourse took place and was advised to say so in interview. He also produced copies of the messages he had exchanged with the complainant which revealed that she had been economical with the truth when making her complaint.


Contact Lewis Nedas Law Expert Criminal Solicitors

If you are facing allegations of assault or sexual offences, contact Lewis Nedas expert criminal defence lawyers on 0207 387 2032 or fill out our online enquiry form here.

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1718 Hits

and Awards

legal 500 uk leading firm 2017 chambers leading firm 2017