Serious Economic Crime is the title of a 312-page guide that you can download for free from the Serious Fraud Office website. Among the contributors to the 36 chapters are Adrian Leppard, City of London Police Commissioner; and Tracey McDermott of the Financial Services Authority, on the FSA’s role in prosecuting market abuse and insider dealing.
Topics include the main fraud offences, such as the Bribery Act 2010. Andrew Gordon and Robert Wilson of audit firm PwC have written a chapter on ‘finding the silver lining in a cloud of chaos’ as a practical guide to managing an external corporate fraud investigation. Robert W Henoch and Brad H Samuels of law firm Kobre & Kim LLP similarly have written on internal corporate investigations and avoiding the pitfalls. Among other chapters from lawyers, Satindar Dogra, Jane Larner and Christopher Kerrigan of Linklaters LLP have also written on the Bribery Act and its implications for non-UK companies listed on the London Stock Exchange.
Anti-corruption on due diligence of business partners is the title of a chapter by Mark Anderson, a partner at audit form PwC. He says: “The guidance from the Ministry of Justice (MoJ) refers mainly to due diligence on ‘associated persons’ as third-party business partners performing services on your behalf, and this emphasis is well reasoned. For most organisations, this presents the single largest risk of illicit payments: a recent study we conducted on corruption investigations by OECD member state enforcement bodies found that approximately 80 per cent of cases involved payments being channelled through an external third party. Your response to this threat should, however, be proportionate to the risks faced by your organisation, taking into account the number, type and role of the business partners you engage with. In our view, each organisation is unique and faces a singular set of risks and challenges that requires a tailored response.” He added: “In our experience, due diligence renewals would typically be conducted on a two- or three-year cycle, or when a material change occurs in the target. Some organisations use monitoring technology to scan more regularly for red flags involving higher-risk business partners, and also obtain annual certifications of compliance as part of a performance review process. Some organisations also offer compliance training to third parties.”
And in a chapter on how to encourage a confidential whistle-blowing help-line, PwC partner Tracey Groves and Harry Holdstock a senior associate at PwC say: “All too often a business is only alerted to misconduct when it is exposed in the media or it attracts the attention of external regulators and law enforcement agencies. Companies have to rely on the knowledge and resolve of individuals who are prepared to speak up and report incidents before news reaches the public domain. All businesses should therefore be concerned that individuals are able to report any issues. However, developing and implementing an effective whistle-blowing regime is one of the most complex challenges that organisations face. In ‘Tone from the Top’, a survey conducted in June 2010 by the PwC Fraud Academy, a forum through which members can share knowledge on economic crime, only 46 per cent of respondents reported that they had access to a confidential whistle-blowing hotline. There is no ‘one size fits all’ for the provision of whistle-blowing arrangements, nor is there any guarantee that a bespoke regime will prove to be effective.”
Harry Travers, the consulting editor from BCL Burton Copeland, said: “It is hoped this publication will play its part in continuing the dialogue as to how serious economic crime should be dealt with in the UK. The collaboration in producing it, between the public and private sectors and various international non-governmental organisations, reflects the new culture of co-operation that is developing in the UK as a result of the SFO’s desire to engage with business and encourage a consensual approach to the treatment of serious economic crime.”
In a foreword, Richard Alderman, Director of the Serious Fraud Office says the first edition of this book comes at a significant period in the evolution of the Serious Fraud Office and, more broadly, with the introduction of major legislation – the UK Bribery Act – that will play a key role in the fight against corporate corruption. “Having emerged from a period of uncertainty, the SFO is now securely positioned for the future. With this in mind, we are driving through a number of initiatives to further strengthen our resources, build closer links with the City, and reinforce our commitment to our international network of partners. These are essential priorities. Economic crime today is increasingly complex in nature and international in scope. To combat this threat effectively and bring justice to the victims of fraud and corruption, we need to work in partnership with our counterparts on the world stage, as well as co-ordinating our activities with agencies closer to home. Closer links with the City of London will allow us to respond even more effectively to the challenges that complex economic crime poses for us today and tomorrow. Together we will protect the huge range of individuals and businesses affected by financial fraud and so help to underpin the City’s reputation for financial probity and transparency – key assets in securing the UK’s position as a pre-eminent international financial and business centre.”
