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AUG
26

SFO Soon to Decide Whether to Charge Barclays Bosses over Alleged Bribery

briberyThe Serious Fraud Office (SFO) may be in a position to decide whether to prosecute former Barclays executives over alleged bribes to Qatari investors during the financial crisis as soon as the end of September.

The investigation into controversial fundraising in the Middle East has been going on for almost two years, but is now anticipated to draw to a close.

Bob Diamond former chief executive, former finance chief Chris Lucas and former tax advisory boss Roger Jenkins have been questioned by the SFO along with some other individuals.

Diamond, who was ousted from his position following a £290million for rigging Libor interest rates, headed up Barclays’ investment bank in 2008 at the time of the controversial fundraising.

It is assumed the fraud investigator will decide by late September or October whether any of the men are to be charged. If the SFO decides to charge those involved, the will become the most senior bakers to be prosecuted for crimes during the financial crisis.

The scenario being investigated relates to Barclays approaching Qatar investors in 2008, in order to avoid asking the UK Government for a bail-out.

The bank secured almost £12billion from two fundraising sources involving Qatar and Abu Dhabi.

Barclays revealed £116million in advisory fees and commission to Qatar Holdings at the time, however the Financial Conduct Authority claimed they had failed to disclose an additional £322million in ‘advisory services agreements’ with the Qatari investor.

Barclays is now facing a £50million fine from the FCA for the conduct.

Furthermore, it has also been revealed that Barclays is also facing a £60 million fine for failing to adequately protect clients’ money.

Contact Lewis Nedas Specialist Solicitors

If you or your company are facing an investigation by either the SFO or FCA, please contact our specialist defence lawyers by calling 020 3432 6608 or completing our online enquiry form.

This blog post is intended as a news item only - no connection between Lewis Nedas and the parties concerned is intended or implied. 

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AUG
27

First Bribery Act Charges Brought by SFO

In a long-awaited move, the Serious Fraud Office (SFO) has brought its first charges under the Bribery Act 2010, just over two years since the Act came into force.

The charges relate to offences of making and accepting a financial advantage, contrary to section 1(1) and 2(1) of the Act, and have been brought against three men connected to a company known as Sustainable AgroEnergy plc. The SFO says that the charges are part of a wider investigation by the department into the promotion and selling of "bio fuel" investment products to UK investors.

The Bribery Act 2010

The Bribery Act 2010 has been in force since 1July 2011, when it created several new offences:

  • bribing,
  • accepting a bribe,
  • bribing a foreign official to either obtain or retain a business advantage, and
  • an offence dealing with commercial organisations who fail to prevent bribery by persons associated with them.

However, in recognition of the fact that companies are not able to control all of the actions of their employees, the Act sets out a defence for companies who can show that they had adequate procedures in place to prevent associated persons from committing bribery offences.

The Act also provides for the prosecution in the UK of bribery committed abroad by persons having a close connection with the UK.

Use of the Act so far

Use of the Act has been relatively limited so far, and this is the first time that the SFO has used the Act to bring charges.

According to reports, there are several reasons for this, most notably the fact that the Act is not retrospective – and can only be used where the offence in question was committed after the Act came into force.

The SFO’s remit is also an issue, given that its purpose is to investigate and, if appropriate, prosecute those who commit serious or complex fraud, bribery and corruption. Less complex or less serious cases are dealt with by other prosecutors.

CPS prosecutions

One example of this is the first conviction secured under the Act by the Crown Prosecution Service. This took place in October 2011, when former court official Munir Patel was convicted for accepting a £500 bribe to make a speeding charge disappear. He was later sentenced to six years imprisonment.

Sentencing guidelines

Sentencing for convictions relating to fraud, money laundering and bribery is actually the subject of a consultation by the Sentencing Council for England and Wales at the moment. The Council is looking for comments on draft guidelines on the issue, which it says are likely to lead to tougher sentences for some.

There is also another important bribery-related consultation currently underway. The Director of the SFO and the Director of Public Prosecutions are consulting on a draft Code of Practice setting out their approach to the use of Deferred Prosecution Agreements (DPAs).

DPAs are important in corporate bribery cases, because they allow for companies to be charged but proceedings to be then automatically suspended. They require the company to agree to a number of conditions, which may include payment of a financial penalty, payment of compensation, and co-operation with future prosecutions of individuals. If the conditions are not honoured, the prosecution may resume.

Comments on the consultation are sought by 20 September 2013.

Contact Lewis Nedas’ Criminal Lawyers in London

If you have been charged with a bribery offence or other form of economic crime, you will need specialist legal advice. For further information or to speak to one of our top bribery and corruption solicitors please telephone us on 020 7387 2032, complete our online enquiry form, or contact Jeffrey Lewis, Jeremy Ornstin, Siobhain Egan or Keith Wood.

This blog post is intended as a news item only - no connection between Lewis Nedas and the parties concerned is intended or implied.

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JUN
17

Total SA’s FCPA Deferred Prosecution Agreement: What Did It Have to do with the USA? – by Siobhain Egan

In short, not a lot!

Why then were the Department of Justice and the Securities and Exchange Commission able to levy some $398 million, the fourth largest fine under the FCPA (Foreign Corrupt Practices Act), the US equivalent to our Bribery Act 2010, and enter into a deferred prosecution agreement with a French oil and gas company in relation to the payment of massive bribes to the Iranians?

It seems that Total SA were involved in paying bribes totalling $60 million to the chairman of an Iranian engineering company between 1995 and 2004, involving two intermediaries. It was alleged that the engineering company was largely owned and controlled by the Iranian government, and it concerned oil/gas drilling rights in the SIRR A and E, South Pars oil and gas fields.

The battle between Total SA and US authorities has been raging since 2010 and the only nexus between the Iranian bribery allegations and the USA was that $500,000 passed through a US bank in 1995. That is the sum total of any monies (0.8% of the bribes) that connected this situation with the Americans.

The French, who do have their own anti-bribery legislation, have decided to recommend that four senior Total SA employees should be prosecuted at some stage, but it isn't suggested anywhere that they stand to gain any of the $398 million fine.

The terms of the DPA itself are interesting not just because they concern such an old allegation, but also that they demand an independent corporate compliance monitor be appointed, and extend international FCPA co-operation to an extent which has not been seen before.

It is also interesting because US legal commentators state that this is the first FCPA DPA that is within the US DPA Sentencing Guidelines, albeit, and surprisingly, at the lower end of the guidelines. It seems that most corporate fines under DPAs to date have been about 25% less than the recommended lower range.

Total did not self-report and did not have any anti-bribery and corruption compliance systems in place at all, so it is interesting that they were able to negotiate a fine towards the lower end of the guidelines in those circumstances.

This also points to a major criticism of the US approach to DPAs; that there just does not seem to be any consistency and transparency of approach, which makes it very difficult for any corporate offender when negotiating with the authorities. This flexibility and lack of a structured approach is useful for the US authorities, and of course the US judiciary currently have no real role to play in these agreements other than rubber stamping them.

This country will take a very different view of DPAs; the Judiciary here are determined to have a structured process with a defined role for the over-seeing Judge to play. The Sentencing Council, when drafting the DPA guidelines, will ensure consistency and transparency of approach. It may be in the end that the US will learn something from this country about the correct approach to DPAs.

However this DPA fine (and the much-rumoured News Corp FCPA settlement, supposedly in the region of $850 million) must be giving the SFO some food for thought?

 

 

 

 

 

 

 

 

 

 

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JUN
16

SFO Director Calls for S.7 Bribery Act 2010 to be extended to Fraud and Money Laundering

Caroline Bingham of the Financial Times (05 June 2013) reports that the SFO Director, when recently addressing a city law firm, bemoaned the difficulties when attempting to prosecute a corporate.

Unlike his US counterparts, where legislation is in place to do so, here the additional problems of identifying the ‘controlling mind’ and/or ‘piercing the corporate veil’ make it well-nigh impossible to bring a successful prosecution, generally because of the complex nature of many corporate and management structures.

David Green QC believes that if S.7 Bribery Act 2010 (failure to prevent bribery, i.e. install and execute adequate anti-bribery compliance systems) could be extended to apply to fraud and money laundering (with the aid of fresh legislation), and it would dovetail nicely with the forthcoming DPAs (Deferred Prosecution Agreements) and encourage the corporates to self-report.

At present the general view of those of us who defend SFO prosecutions is that without any genuine threat of a corporate prosecution why should the corporates self-report and enter a DPA?

It will be interesting to see if and when the Director gets his way.

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MAY
07

SFO: Perhaps the Phoenix Will Rise from the Ashes, After All?

A quick analysis of the SFO’s recent activities shows that the SFO director David Green does mean business and has secured additional funding in order to do so.

Finally, the SFO have lost patience with ENRC and all that has gone on with that company regarding an investigation into African bribery and corruption. This is a good example of a potential civil settlement going badly wrong and it looks likely that a criminal inquiry will now get underway since the SFO have served a s.2A notice.

The SFO also want to draw a line under the Rolls Royce corruption allegations originating in Indonesia, and are apparently considering a Civil Recovery Order. Presumably, this case would have been an ideal candidate for a Deferred Prosecution Agreement, however these will not come into effect until February 2014. They also seem to have BUMI and the alleged missing £48 million within their sights, and finally perhaps some movement on the Libor criminal inquiry. The SFO are currently advertising for a lawyer to assist with their endeavours in this regard.

It seems that the SFO have secured additional funding after having had their budget slashed in the Government’s recent austerity drive. They have increased income to a new high of £6.6 million in 2011/12 as a result of asset seizures, secured £3.5 million for the Libor criminal inquiry from the Treasury, and also ‘blockbuster’ funding for any investigation deemed to cost more than £1.5 million.

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