The Serious Fraud Office (SFO), which has agreed a handful of high-profile deferred prosecution agreements (DPAs) with companies that have co-operated on investigations, has released details of guidelines for those looking to strike a plea deal
The guidance notes there is a public interest factor tending against prosecution when management has adopted a ‘genuinely proactive approach’ upon learning of the offending.
Cooperation, defined as providing assistance to the SFO that goes above and beyond what the law requires, can be an important part of such a genuinely proactive approach, the regulator said.
This includes identifying suspected wrongdoing and criminal conduct with the people responsible, regardless of their seniority or position in the organisation; reporting this to the SFO within a reasonable time of the suspicions coming to light; and preserving available evidence and providing it promptly in an evidentially sound format.
The guidelines state that: ‘Genuine cooperation is inconsistent with protecting specific individuals or unjustifiably blaming others; putting subjects on notice and creating a danger of tampering with evidence or testimony; silence about selected issues; and tactical delay or information overloads.’
However, the SFO makes clear that cooperation - even full, robust co-operation - does not guarantee any particular outcome.
The guidelines set out expectations about how information, including financial records and digital data, will be collected, presented and preserved. This can include material from third parties.
They state that companies must be prepared to make ‘accountants and/or other relevant personnel (internal and/or external) available to produce and speak to financial records and explain what they are and what they show about money flows’.
As regards individuals, the SFO states that companies should consult with the regulator before interviewing potential witnesses or suspect, or taking HR or other overt actions, in order to avoid prejudice to the investigation.
The regulator also says companies should ‘refrain from tainting a potential witness's recollection, for example, by sharing or inviting comment on another person's account or showing the witness documents that they have not previously seen.’
The SFO issued its first DPA in 2015, to Standard Chartered Bank in relation to bribery charges in Tanzania, while a more recent DPA saw Tesco pay a £129m fine, marking the conclusion of the regulator’s investigation into accounting irregularities.
US lawyer Lisa Osofsky, who took over as SFO head in late August 2018, has indicated she intends to make wider use of this option.
Pat Sweet | 08-09-2019