Legal News

Legal and regulatory developments At present, non-financial misconduct is still not explicitly referenced in the fitness and propriety assessment for those holding a Senior Management Function ( SMF) or a Certification Function ( CF), nor within the broader conduct rules applied more widely to staff and employees across firms. Nonetheless, the FCA has pursued non-financial misconduct cases, despite criticism arising from its action against John Frensham. Heard by the Upper Tribunal in 2024, that case created a benchmark for fitness and propriety assessments, confirming there must be a meaningful link or nexus between the misconduct and the individual’s role in financial services. The FCA’s September 2023 consultation proposed expressly bringing non-financial misconduct into the regulatory framework. In particular: bullying in the workplace is pertinent and relevant to fitness and propriety, and comparable conduct in a person’s private life is also...

The European Banking Authority ( EBA) relies on a database to circulate intelligence to domestic supervisors about grave AML and counter-terrorist financing failings at institutions such as banks and life insurers, together with the regulatory measures taken by authorities and steps pursued. The watchdog obliges regulators to file significant findings straight away in the European reporting system for material CFT/ AML weaknesses ( Eur Re CA). On 2 May 2024, the EBA said that, from May 2024, supervisors could enter in the database named individuals associated with serious AML-related deficiencies, whether they are customers, beneficial owners, or senior managers of financial firms and institutions. As the EBA explained, if a serious deficiency or a measure is tied to a national person, for example a customer or a beneficial owner, supervisors will be able to submit this information to Eu Re CA. A natural person is an...

On 18 April 2024, the UK’s Serious Fraud Office unveiled its 2024–2029 strategy, the first under new director Nick Ephgrave. Echoing themes from his February 2024 maiden address, the plan is deliberately ambitious, signalling an intention for the SFO to be recognised as the leading specialist, innovative and collaborative body driving the fight against serious and complex fraud, bribery and corruption. This overarching ambition is distilled into four objectives, each with concrete actions slated as soon as 2025: build a highly specialised, engaged and expert workforce be prepared to harness evolving technology and tools counter crime effectively through intelligence, enforcement and prevention act proactively within both domestic and global justice systems Recruiting, developing and retaining a highly specialised, engaged and skilled work force The complexity of the SFO’s caseload necessitates multi‑disciplinary expertise, with teams of lawyers, investigators and forensic accountants working together. Nevertheless, the two most recent...

Duty of candour and requests for mutual legal assistance ( R (on the application of MCML Ltd (formerly ED& F Man Capital Markets Ltd) and another v Southwark Crown Court) R (on the application of MCML Ltd (formerly ED& F Man Capital Markets Ltd) and another v Southwark Crown Court [2024] EWHC 861 ( Admin) What are the practical implications of this case? This decision refreshes the tests that govern assistance sought from abroad, while underlining the barriers facing practitioners who seek to set aside search warrants granted on such requests. Errors and inaccuracies were contained in material sent by the German and Dutch authorities to HMRC, which HMRC then relied upon when applying for warrants. The judge was not told that the Financial Conduct Authority had ended its investigation into one claimant without further...

Siobhain Mc Donagh, a Labour Party representative in the House of Commons, formally urged HMRC to investigate Alutech, owned by Hormann, alleging the company has imported goods banned since 2022, per a Treasury Committee transcript of the meeting on 30 April 2024......

The Economic Crime Manifesto II The All- Party Parliamentary Group ( APPG) on Anti- Corruption and Responsible Tax, alongside the APPG on Fair Business Banking, has released The Economic Crime Manifesto II (the Manifesto). It follows the 2022 document and arrives amid intense focus and action on financial crime. Over intervening years, changes at home and abroad have unfolded, sharpening attention on risks and the UK’s capacity to respond. Serving as a sequel to the 2022 edition, this iteration lands amid intensified scrutiny and momentum across the financial crime landscape. In the meantime, notable shifts have occurred both internationally and at home. As the Manifesto underscores, the risk posed by financial crime—especially fraud—now appears particularly acute in the UK. Among the stark findings it sets out, the UK’s illicit finance issues are estimated to cost around £350bn annually, approaching 15% of national GDP. The...

What are the key areas? Fisher’s review seeks to pinpoint which elements of the criminal disclosure system function well and which do not, so as to judge whether the regime, as it stands, can secure fair criminal justice outcomes and properly prevent miscarriages of justice. In line with this, he has set out the following ‘emerging themes’ for scrutiny: scrutiny of the existing statutory framework and its real-world operation evaluation of the principal tests in the Criminal Procedure and Investigations Act 1996 ( CPIA 1996) and the associated Code of Practice (the Code) examining how technology and artificial intelligence ( AI) could support the criminal disclosure regime, and early engagement as a possible route to improve the regime’s efficiency and effectiveness Which are the most controversial and why? CPIA 1996 tests As regards the Code’s definition of ‘relevant material’, Fisher plans to examine the...

In this issue: Investigating criminal conduct Criminal procedure and evidence Bribery, corruption, sanctions and export controls Cybercrime and data protection offences Environmental offences Financial services and pensions offences Fraud, forgery, tax and theft offences Health and safety and corporate manslaughter offences Local authority prosecutions Money laundering International Lex Talk® Corporate Crime: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Investigating criminal conduct Court upholds lawfulness of raid on broker in cum-ex fraud probe. The London premises of commodity broker MCML Ltd were searched at the behest of Danish prosecutors examining a purported £56m tax fraud; a London court confirmed the search was lawful on 17 April 2024. See News Analysis: Raid on broker in cum-ex fraud case was...

Criminals have adjusted to shifts in EU rules on payment services to dupe people into surrendering their personal details, the European Banking Authority ( EBA) has warned. In turn, the EBA has set out steps, complementing European Commission plans, to reduce the threat of payment scams, noting that customer authentication requirements, which have curbed fraud-based theft of consumer data, have prompted offenders to alter their methods. The EBA, in its opinion, said criminals have been able to rework their approaches, giving rise to more sophisticated fraud, notably by exploiting social engineering. An increasing share of scams now hinges on manipulating victims, or blends social engineering with technical deception to trip up consumers, the EBA said. Such schemes include authorised push payment attacks aimed at consumers, as well as other comparable fraud patterns observed by the authority......

An open letter dated 26 April 2024 bears signatures from a spectrum of bodies, among them UK Finance and the Association of British Insurers. It presses the Chancellor of the Exchequer to confront the FCA’s plans, which, the signatories contend, would undermine the UK’s competitiveness. The regulator outlined proposals in February 2024 that, it claimed, would strengthen the deterrent impact of enforcement and permit it to name publicly the targets of its inquiries. The coalition, which also features The City UK and the Personal Investment Management & Financial Advice Association, argued the plans are out of step with other markets and supervisors. They warned this would render the UK an ‘international outlier’ on enforcement. ‘ As drafted, the proposals are likely to harm the competitiveness of the UK’s financial services industry by deterring investors, and to produce poorer outcomes for...

High Court Judge Philippa Whipple found 'no merit' to MCML's case that the search of its business premises was 'disproportionate and unnecessary'. She stated there were very serious suspicions about MCML’s historic behaviour (previously ED& F Man Capital Markets Ltd), adding that it was naive to contend that production orders would have been effective and sufficient in the circumstances. According to the judgment, in September 2022 Judge Deborah Taylor granted search warrants at Southwark Crown Court after HM Revenue and Customs applied for them, following a request for legal assistance from authorities in both Denmark and Germany. As the written judgment notes. The ruling records that Judge Taylor concluded there were reasonable grounds to believe the suspects’ conduct, constituting an offence under Danish law, had been carried out. In June 2023, the broker was issued with a £17.2m penalty by the Financial Conduct...

Released on 24 April 2024, the initial review authored by Jonathan Fisher KC of Red Lion Chambers identifies where the seasoned silk thinks progress could be achieved in updating a disclosure regime designed nearly three decades ago. Fisher believes that engaging the defence and the prosecution at an earlier stage could deliver huge gains, and he expresses confidence about the potential of artificial intelligence ( AI). Yet he cautions that, in sprawling, data-rich matters, no flawless answer is available. Importantly, Zoe Osborne of Steptoe International ( UK) LLP observed that the exercise does not seem to press for sweeping reforms to the framework, changes that would require Parliamentary sign-off and would probably face fierce opposition. Instead, she remarked, piecemeal adjustments to what already exists are required. That, Osborne suggested, might amount to a squandered opportunity to confront the root problems and resolve them, opting...

Following the government’s February 2024 campaign to highlight the victims’ code—a practical guide assisting victims of crime to understand the services and support they are entitled to in the UK—the focus has shifted back to the misuse, or perceived misuse, of NDAs and their effects. On 28 March, the UK Ministry of Justice announced plans to introduce legislation to ensure victims are not prevented from accessing justice or essential support services. [1] The proposed reforms would render ‘gagging’ provisions unenforceable where they would stop victims providing information about actual or alleged criminal conduct to: the police or other prosecuting authorities qualified and regulated legal practitioners, or other support services operating under clear confidentiality principles, including, for example, counsellors, advocacy services and medical professionals This article examines the drivers for the proposed legislation, the Solicitors Regulation Authority’s ( SRA’s) warning notice on the use of...

Nick Ephgrave accepted it is a fact that the agency’s workload is now more evenly divided between domestic fraud investigations and international bribery and corruption cases. He emphasised that the volume of victims and the magnitude of the alleged offences sit squarely within the SFO’s remit. He pointed to numerous instances of large, complex and serious UK‑based fraud, in which many thousands—tens of thousands—of ordinary, hard‑working people have been stripped of their money. He wanted to pursue that area and visibly demonstrate intent. Ephgrave also stressed the SFO is still entirely focused on bribery and corruption, as it is the only body structured to tackle such cases, while also aiming to make the SFO relevant to the taxpayer. In remarks made in March 2024 and again in early April 2024 about the SFO’s new strategy, the head of Britain’s...

In this issue: Investigating criminal conduct Proceeds of crime Bribery, corruption, sanctions and export controls Consumer protection and cartels Environmental offences Financial services and pensions offences Fraud, forgery, tax and theft offences Health and safety and corporate manslaughter offences Local authority prosecutions Corporate Crime in Scotland International Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Investigating criminal conduct SFO vows to be ‘bold and pragmatic’ under new strategy. On 18 April 2024 the SFO announced a new five‑year plan prioritising fraud prevention, harnessing AI, and expanding the deployment of covert intelligence. The approach signals director Nick Ephgrave’s aim for the agency to act with greater proactivity and pragmatism. See News Analysis: SFO vows to be ‘bold and pragmatic’ under new strategy and LNB News 18/04/2024 19. Proceeds of crime New and updated POCA 2002 Codes of Practice. Fresh and revised codes covering asset recovery and investigatory powers under the Proceeds of Crime Act 2002 ( POCA 2002) have...

The pilot programme grants non-prosecution agreements to eligible individuals who proactively supply original information to the Criminal Division about specified forms of corporate criminal misconduct. This is the first occasion on which a US DOJ initiative has expressly agreed to forgo prosecuting an individual in return for their co-operation against a company. Although the programme can cover wrongdoing by any public or private company, it appears particularly directed at misconduct by banks, investment funds and healthcare providers; violations of the Foreign Corrupt Practices Act, the Foreign Extortion Prevention Act and the money laundering statutes; and fraud tied to government contracting, including the payment of bribes or kickbacks to domestic public officials. The US DOJ has introduced a range of programmes to encourage whistleblower reports and corporate voluntary self-disclosures. This self-disclosure pilot for individuals maintains the Department’s emphasis on corporate criminal...

The white-collar enforcement agency said in its report that it has adopted a strategic focus on preventing fraud, bribery and corruption. The approach prioritises streamlining its caseload, strengthening recruitment and retention, and deploying covert powers to secure evidence more quickly and build compelling cases in shorter timescales, as set out in the report. In the report’s opening, Ephgrave wrote that the SFO must be seen as a strong, dynamic, confident and pragmatic organisation. He added that this requires playing a greater role in the national drive to tackle fraud, ensuring SFO cases move at a faster pace, taking bold and pragmatic decisions on casework, and, ultimately, being regarded as the partner of choice both domestically and internationally......

In this issue: Appeal and judicial review Bribery, corruption, sanctions and export controls Environmental offences Financial services and pensions offences Fraud, forgery, tax and theft offences Goods vehicle licensing Health and safety and corporate manslaughter offences Local authority prosecutions International Other corporate crime news Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Appeal and judicial review Legal experts uneasy about Post Office convictions law On 16 April 2024, legal specialists strongly warned a parliamentary committee that the government’s proposal to pass legislation overturning the convictions of hundreds of Post Office branch managers may inadvertently set a benchmark for addressing other miscarriages of justice. See News Analysis: Legal experts uneasy about Post Office convictions law. Bribery, corruption, sanctions and export...

The House of Commons Justice Committee heard evidence on the implications of deploying legislation to clear all sub-postmasters convicted in England and Wales in response to the Post Office Horizon scandal. MPs were told that victims of other systematic abuses might ask why their own convictions are not being reconsidered... Hannah Quirk, a former reviewer at the Criminal Cases Review Commission and a university lecturer, told the committee there are very serious concerns about government ministers and parliament becoming directly involved in quashing convictions. She noted that people whose convictions have been overturned by the Court of Appeal, as well as those granted pardons, may question whether there is any distinction between their innocence and that of individuals who are acquitted through the passage of a new law... The government has introduced legislation that will overturn convictions for theft, fraud, false accounting and money...

The EU General Court has set aside the first round of sanctions on Mikhail Fridman and Petr Aven, ruling that the evidence did not adequately demonstrate links to Vladimir Putin’s regime or efforts to destabilise Ukraine following Russia’s 2022 invasion. The pair—major shareholders in Alfa Group, the conglomerate behind the Russian heavyweight Alfa Bank—remain listed while their challenge to a subsequent package of measures, imposed in March 2023 after their designation, moves through the courts in a separate action. Lawyers suggest this early win may encourage some of the other 1,700 listed people and organisations with cases before the European court, especially where proceedings in England have fizzled out. Maria Nizzero, a financial crime and security specialist at the Royal United Services Institute think tank, said the decision marks a notable departure from UK court cases, where judges have shown marked deference to...