Vertical Markets

Where should the buck stop?

by Mark Rowe

Where should the buck stop, in cases of corporate fraud? “My answer as an investigator/prosecutor is: the buck stops where the evidence takes us,” said David Green, Director of the Serious Fraud Office (SFO), at the Cambridge Symposium on Economic Crime 2016, at Jesus College, Cambridge.

He said: “As an enthusiastic supporter of a new “failing to prevent economic crime” offence since 2012, I warmly welcome the consultation announced at the Anti-Corruption Summit [in May 2016].

“As things stand, before a company can be prosecuted in this country, the “identification principle” requires the prosecutor to identify the “controlling mind” of the company and prove that that person was complicit in the offence under investigation. In a world of increasingly complex corporate structures, the identification principle can hobble the prosecutor in those cases where it is right to prosecute the company.

“The principle is illogical in that at present it is the only route to liability for all major economic crime offences (fraud, false accounting, money laundering) except bribery and (soon) tax evasion. The principle operates unfairly: it is always easier to identify the controlling mind in a small company than in the case of a large corporation.

“It also creates unhelpful incentives for senior executives: on the one hand to distance themselves from knowledge of operations in fraud cases, on the other to preach compliance in bribery cases so as to demonstrate adequate procedures. Tom Hayes was prosecuted in this country for his role in Libor manipulation. The operation of the identification principle meant that we could not touch the bank for which he worked whilst manipulating Libor. That bank was held to account for Hayes’ conduct in a New York courtroom, where vicarious liability made the prosecution a much simpler matter.

“A “failure to prevent economic crime” offence would significantly increase the prosecutors’ reach in those cases where a company should be held to account for the conduct of persons associated with it. It would also underpin the anti-corruption, responsible capitalism and social justice agendas, and the prosecutors’ contribution to those efforts.”

He also covered some recent results, such as that Barclays Libor trial, and confiscation and asset recovery; and what he termed the SFO’s ‘real effort in building strong cooperative relations with foreign agencies in key financial centres across the globe’. For the speech in full visit the SFO website.

Related News

  • Vertical Markets

    German case study

    by Mark Rowe

    German retailer DM Drugstores, decided to upgrade their CCTV for each of their stores across the country. Christian Berkigt, Chief Development Officer…

  • Vertical Markets

    Heathrow deal

    by Mark Rowe

    The product manufacturer Morpho (Safran), through its subsidiary Morpho Detection, reports a contract with London Heathrow Airport Ltd. to supply 45 CTX…

Newsletter

Subscribe to our weekly newsletter to stay on top of security news and events.

© 2024 Professional Security Magazine. All rights reserved.

Website by MSEC Marketing