Internal Investigations

Charities are not immune to financial crime, fraud or other wrong-doing; there are a number of ways in which charities may be exploited by criminals. 

Interviews are frequently conducted by office-holders with individuals previously involved with an insolvent company, such as directors and officers, employees, accountants, lawyers and other third parties. Such interviews will often provide key information regarding the company’s trading and dealings and the actions of its directors and employees, thereby assisting office-holders seeking to investigate potential fraud, misfeasance and other forms of misconduct.

In September 2018, the Court of Appeal handed down its judgment on ENRC’s appeal against Andrews J’s High Court decision in the case of The Director of the Serious Fraud Office v ENRC. The judgment has been praised for going some way to restore sense and order to the protection of legal professional privilege.

At the end of last year the National Crime Agency published its annual report on Suspicious Activity Reports (SARs) for 2018. Media reporting (such as in the FT, subscription required), on the annual report has focussed, amongst other things, on the relatively small proportion of SARs made by lawyers. Is this a fair criticism and, if so, what is the reason for it?

Many a CF11 money-laundering reporting officer has watched the police carry his bank's computers away in the knowledge that this will bring its business - or part of it - to a grinding halt. What can a firm do to minimise disruption of this kind and challenge a search warrant? In this blog, Vivien Cochrane takes the compliance officer through the vagaries of British law, with a checklist for action at the end. 

ENRC’s highly anticipated challenge to Andrews J’s High Court decision in the case of SFO v ENRC was recently heard over three days in the Court of Appeal.

In another recent case relating to the circumstances required to successfully establish a claim to litigation privilege (see Philip Salvesen’s blog on the case of Bilta & Ors v RBS & Anor [2017] EWHC 3535 (Ch), the Court of Appeal (Criminal Division) has followed the approach adopted in SFO v ENRC [2017] 1 WLR 4205 in ruling that a statement made by an employee to his company’s solicitors as part of their investigation into a death at work was not covered by privilege.

The recent case of Edwardian Group Ltd v Singh [2017] EWHC 2805 (Ch)(“Edwardian Group”) has clarified the extent to which privilege can be claimed over documents in which legal advice is not explicitly stated but can be inferred. At a time when a string of recent authorities have appeared to limit the scope of privilege (Director of the SFO v ENRC [2017] EWHC 1017 and RBS Rights Issue in particular), it is reassuring to see a decision which reinforces the fundamental protection provided by privilege and offers assistance to a party wishing to assert a claim. 

The question of when, and in what circumstances, a document capable of enjoying the protection of legal professional privilege will be said to have lost its confidentiality such that privilege cannot apply has arisen in two cases in separate jurisdictions in recent weeks.

Debate during the 2017 general election campaign has, predictably, centred on Brexit. The UK is scheduled to leave the EU by April 2019. However, until we leave, the UK remains a Member State of the EU and is therefore subject to the obligations of EU law and the acquis communautaire. One of the fundamental principles of EU law is the requirement placed on EU Member States to implement Directives. Ordinarily, a Directive must be provided for in domestic law by a Member State by a specified date. It would appear that thanks, at least in part, to Theresa May’s decision to call a snap general election, the Directive on the European Investigation Order (“the Directive”) has not been implemented by the UK within the prescribed time period. In this blog, we explore what has (not) happened. 

With the advent of the Senior Managers and Certification Regimes soon upon us, the Financial Conduct Authority (FCA) has issued a policy statement that sets out the final rules for the application of the new accountability framework for individuals working in the UK branches of overseas banks (incoming branches). Accordingly the position in relation to the application of the Senior Managers Regime (SMR), Certification Regime (CR) and Conduct Rules to incoming branches and their staff is now clear. 

More than four years since the offence of failure to prevent bribery was introduced through s7 of the Bribery Act 2010, the UK’s first s7 resolution has taken place in Scotland. Following a self-report in June 2015, the Crown Office has agreed a civil recovery order with Brand-Rex Ltd, a company that develops cabling solutions for network infrastructure and industrial applications. The self-report related to an independent installer who had passed on to a customer the benefit of an incentive scheme which was aimed at Brand-Rex’s installers and distributors.

The government has announced that it will not proceed with the proposed extension of the corporate criminal offence of failure to prevent bribery under s7 of the Bribery Act (“the s7 offence”) to encompass a wider range of economic crime. It has also shelved its review of whether current rules on corporate criminal liability should be widened to make it easier to convict companies who commit wrongdoing. 

The US Department of Justice (“DoJ”) has issued a memorandum to Federal Prosecutors on Individual Accountability for Corporate Wrongdoing (“the Yates memo”). It is widely regarded as the DoJ’s response to criticism that they tend to prosecute companies rather than individuals in contrast to the criticism often levelled at their English counterparts at the SFO.

The Government’s latest step in its Cutting Red Tape review programme focuses on the regime to prevent money laundering and terrorist financing.  Louise Hodges looks at the review and how preparations for the Fourth Money Laundering Directive are to be set in train. 

There has long been a call to make the reporting of fraud a compulsory requirement, akin to the suspicious activity reports regime in money laundering, so that we have a full picture of the amount of fraud that goes on. 

The FCA has published its 2015/16 business plan, a weighty document setting out its strategy and priorities for the next 12 months...

A written statement by the Economic Secretary on 3 March 2015 announced the timetable for the introduction of the Senior Managers and Certification Regime (SM&CR) under the Financial Services (Banking Reform) Act 2013. The Government also announced that following a period of consultation it had decided to extend the SM&CR to UK branches of foreign institutions.

The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) published a paper 24 February 2015 entitled “Approach to non-executive directors in banking and Solvency II firms & Application of the presumption of responsibility to Senior Managers in banking firms” (referred to here as “the New Consultation”). 

On 3 February 2015 Cumbrian building firm Peter Mawson Ltd became the latest company to be convicted of corporate manslaughter. The conviction followed the death of Jason Pennington who was killed in 2011 when he fell through a skylight onto concrete. The company, which pleaded guilty to the offence, was fined £220,000, as well as costs of £31,500.