In the run up to the UK’s General Election, the political parties set out their vision for the future. According to the Conservative manifesto, this includes rolling up the Serious Fraud Office (SFO) into the National Crime Agency (NCA) thereby ‘strengthening Britain’s response to white-collar crime…improving intelligence sharing and bolstering the investigation of serious fraud, money laundering and financial crime.’
The pledge has not been entirely welcomed by the legal community. As the UK’s only dedicated, and independent, investigator and prosecutor of serious fraud and complex economic crime, some see the proposal as allowing for political interference; while others have gone further by suggesting it threatens the UK’s reputation as a protector and champion of the rule of law. Those in favour of rolling up the SFO see the pledge as an opportunity: by increasing the flow of information between law enforcement and security agencies, and introducing a single strategy for tackling interconnected threats, the UK may be able to more effectively tackle fraud, money laundering, bribery, terrorist finance and serious organised crime.
Whatever the future may hold, this recent development is yet another in a long history of threats to bring the SFO to an end. In this blog post we provide a brief overview of its purpose and some of its notable failures and successes.
What does the SFO do?
The SFO is a non-ministerial, and therefore independent, government department responsible for detecting, investigating and prosecuting large scale and complex fraud, bribery and corruption cases. It was established nearly 40 yearsago by the Criminal Justice Act 1987 following a series of financial scandals in the City of London and a report (known as the Roskill Report) into how the law and criminal proceedings could be changed to improve the way serious or complex frauds were handled by the authorities.
The SFO has jurisdiction in England, Wales and Northern Ireland to take on large economic crime cases. Although it is not part of the criminal justice system covering Scotland, the Isle of Man or the Channel Islands, it plays a large role in assisting overseas jurisdictions, such as the US Department of Justice, investigating serious and complex fraud, bribery and corruption. It also works closely with other national law enforcement bodies and agencies, including the NCA’s Economic Crime Command, International Corruption Unit and Bribery & Corruption Intelligence Unit, the City of London Policy, regional forces, HM Revenue & Customs (HMRC) and the Financial Conduct Authority (FCA).
In terms of resources, it has approximately 400 full time employees, including investigators, forensic accountants, lawyers, analysts and digital forensics experts, and expands its workforce with temporary and fixed term staff when especially big cases are taken on. While it is relatively small compared to other government departments, it has a fairly sizeable annual budget of approximately £35 million (although it has been subject to a series of budget cuts over the years). It usually has approximately 60 criminal investigations and prosecutions live at any one time.
As the primary complex economic crime enforcer, it only takes on the most complex and serious cases. This means it will only open an investigation if the case meets certain criteria. These include cases which undermine the UK’s economy, in particular the commercial and financial interests of the City of London, where the actual or potential loss involved is high or harm is significant, where there is a very significant public interest element or if it presents a new species of fraud.
In order to carry out investigations and bring prosecutions, it is granted significant powers. These include the power to search property and require individuals to produce documents and answer questions. You can find out more about the powers of the SFO and its approach here.
SFO failures and successes
- The SFO is no stranger to controversy. An investigation into the Al-Yamamah arms deal between the UK and Saudi Arabia in the 1980s was dropped in 2006 drawing substantial criticism and a High Court ruling that the SFO had acted unlawfully. Although the ruling was overturned by the House of Lords, the case caused substantial harm to the SFO’s reputation.
- A high-profile investigation into the Guinness takeover of the Distillers Company following rumours of an unlawful share support operation may have resulted in the conviction of the then Guinness chief executive and three other defendants in 1990, but it also involved the collapse of two trials and the acquittal of four other businessmen.
- Further allegations of share rigging during a takeover led to the Blue Arrow case, estimated to have cost £40 million and reported as one of the longest cases in English criminal history.
- The SFO has arguably been more successful in recent years. For example, City trader Tom Hayes was the first person convicted for rigging Libor interest rates in 2015. The organisation is also making greater use of Deferred Prosecution Agreements.
Our Approach to Serious Fraud Defence
Our partner-led Serious Fraud team has vast experience dealing with the SFO and defending complex fraud cases, many with a large international dimension. Our multifaceted approach, which includes involving specialist professionals, marks our Serious Fraud team out as a distinctive and progressive law firm that takes special care to protect our clients’ interests. We handle SFO investigations and prosecutions in a way that insulates our client’s from the majority of the administrative and logistical issues, allowing them to concentrate on working directly with our specialist solicitors to formulate a strategy for dealing with agencies and their investigations.
Lewis Nedas Law – Specialist SFO Solicitors London
Our expert corporate crime defence team has over 40 years’ experience successfully defending clients against serious fraud and financial crime allegations. We are also ranked in Chambers and the Legal 500 for the high quality of our fraud work, and our expert solicitors are described as 'precise', 'steely determined' and 'always mindful of securing the best outcome'. Our specialist financial crime & fraud solicitors, based in the heart of London, therefore have extensive experience providing our clients with thorough representation and successful defences when faced with a SFO investigation or prosecution. For more information, please contact Jeffrey Lewis or Siobhain Egan on 020 7387 2032 or fill out our online enquiry form.
