United Kingdom

Topic: Investigations and enforcement

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The SFO publishes Cooperation Guidance: expecting too much and offering too little?

Earlier this month, the UK Serious Fraud Office (SFO) published its Corporate Cooperation Guidance (the Guidance), providing a list of “good practices” it expects from companies seeking to obtain a deferred prosecution agreement (DPA). The Director of the SFO has said that the Guidance would provide “added transparency about what [companies] might expect if they … Continue Reading

Upper Tribunal dismisses application by financial advisers firm to suspend an FCA Supervisory Notice until final hearing

On 25 July 2019, the Upper Tribunal (Tax and Chancery Chamber) published a decision in respect of Sussex Independent Financial Advisers Limited (Sussex). Sussex sought to challenge a Supervisory Notice issued by the FCA which removed all of the firm’s permitted regulatory activities with effect from 8 July 2019.  It also imposed requirements restricting Sussex’s … Continue Reading

PRA speech on its approach to enforcement

On 31 July 2019, the Bank of England (BoE) published a speech given by Miles Bake (PRA Head of Legal, Enforcement & Litigation Division). In his speech, Mr Bake outlined the PRA’s approach to enforcement providing an overview of recent PRA enforcement actions and explained the enforcement department’s agenda going forward. In terms of recent … Continue Reading

FCA publishes its Anti-money Laundering Annual Report emphasising the use of ‘dual track’ enforcement

On 9 July 2019, the FCA published its Anti-money Laundering (AML) Annual Report for 2018/2019. The report echoes Mark Steward’s comments in a speech earlier this year in relation to the FCA’s increasing focus on criminal investigations for money laundering. The newly published Report states that ‘some’ of the FCA’s current AML investigations are now … Continue Reading

Court approves first-of-its kind “Group” DPA: five key points

On 4 July 2019, the UK’s fifth Deferred Prosecution Agreement (DPA) was approved. The DPA is between the Serious Fraud Office (SFO) and Serco Geografix Limited (SGL), a subsidiary of Serco Group PLC, and relates to fraud and false accounting offences. The offences relate to a scheme to dishonestly mislead the Ministry of Justice (MoJ) … Continue Reading

High Court’s judgment provides insight on how banks deal with suspicions of money laundering activities

On 8 July 2019, in the case of N v the Royal Bank of Scotland plc, the High Court (the Court) handed down a judgment which provides guidance on how banks respond to alleged money laundering activities. N, an authorised payment institution, issued proceedings for an interim mandatory injunction against the bank after it decided … Continue Reading

UK Government releases final Report on Independent Review of the Modern Slavery Act 2015

On 22 May 2019, the UK Government presented to Parliament its final Report following the conclusion of the Independent Review of the Modern Slavery Act 2015 (the “Act”). The Independent Review was launched in July 2018 by Frank Field MP, Maria Miller MP and Baroness Butler-Sloss. The Review focused on the following four areas relevant … Continue Reading

First-Tier Tax Tribunal held that third party notices have extra-territorial effect

The First-Tier Tax Tribunal (FTT) has recently held that HMRC can issue third party information notices to non-UK residents under paragraph 2 of Schedule 36 to the Finance Act 2008 (Schedule 36). The FTT in Mr and Mrs PQ v HMRC[1] held that the residency status of individuals will not in itself determine HMRC’s ability … Continue Reading

UK Law Commission calls for money laundering guidance in relation to transactions involving the legal cannabis industry

The Law Commission has today published its report  on the SARs regime following its consultation paper. Amongst wide-ranging recommendations to improve the regime, it has recommended that the government consider the need for guidance in relation to transactions involving the legal cannabis industry in Canada and elsewhere. Such guidance would certainly be useful to the … Continue Reading

FCA publishes Decision Notices concerning the market disclosure and related conduct of a premium listed issuer, its CEO and Finance Director

The FCA has decided to fine a premium listed issuer, Cathay International Holdings Limited (Cathay) £411,000 for a number of breaches of the Listing Principles and the Disclosure and Transparency Rules.  In addition, the FCA has decided to fine Cathay’s CEO £214,300 for being knowingly concerned in those breaches and its Finance Director £40,200 for … Continue Reading

Hope for investors in London Capital & Finance as FSCS continues to explore whether there are grounds for compensation

London Capital & Finance (LC&F), which collapsed in January 2019, was authorised by the FCA in relation to its promotional activities. However, the actual sale of mini-bonds by LC&F was not a regulated activity and so not typically protected by the Financial Services Compensation Scheme (FSCS), which has called into question the scope of protection … Continue Reading

London Stock Exchange announces public censure and £300,000 fine for a PLC for AIM Rule breaches

On 30 May 2019, the London Stock Exchange (the Exchange) announced a public censure and £300,000 fine for a PLC in relation to breaches of a number of AIM Rules for Companies (AIM Rules) arising from a variety of failings including misleading announcements, non-disclosure of related party transactions and inadequate board level challenge.  The fine … Continue Reading

UK Supreme Court grants KBR Inc. leave to appeal against controversial decision on extraterritorial effect of Section 2 Notices

On 8 April 2019, the UK Supreme Court granted KBR Inc. leave to appeal against a decision that allows the SFO to compel certain foreign companies to hand over documents held overseas. The Supreme Court’s decision was published on 23 May 2019 (see here). KBR Inc. is appealing the judgment in R (on the application … Continue Reading

FCA publishes Notice of Undertaking by debt management firm in relation to unfair cancellation terms in standard form contracts

On 23 May 2019, the FCA published a Notice of Undertaking against the debt management firm, stating that it was concerned that: two of the terms in the firm’s standard form contracts had the potential to give the firm discretion to charge consumers unspecified amounts should a consumer cancel the contract, which could lead to … Continue Reading

FCA rejects Complaints Commissioner’s recommendation for ex gratia payment in respect of loss related to defective Financial Services Register

The complainant suffered loss after she invested in a firm which was later identified as a clone.  Before investing, the complainant had contacted the FCA to ask whether the firm (also regulated in Austria) was a regulated entity. The FCA confirmed that the firm was legitimate based on its registration number. The FCA also recommended … Continue Reading

FCA publishes undertaking by firm in relation to unfair termination clause in standard client terms

On 9 May 2019, the FCA published an undertaking given by an investment management firm in relation to a term in its standard client contracts which allowed the firm to terminate the contract without the requirement to provide prior written notice. The FCA considered that the term was likely to be considered unfair under the … Continue Reading

London Metal Exchange launches consultation on new responsible sourcing standards for all traded metals

On 23 April, the London Metal Exchange (LME) launched a formal market-wide consultation on the introduction of responsible sourcing standards for all traded metals. Under the new rules, all LME listed brands will be required to undertake a phased approach, starting with a Red Flag Assessment based on the OECD Guidelines for Multinational Enterprises by … Continue Reading

A Framework for OFAC Compliance Commitments

Yesterday, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) published ‘A Framework for OFAC Compliance Commitments’* in order to provide organizations subject to US jurisdiction, as well as foreign entities that conduct business in or with the United States or US persons, or that use US-origin goods or services, with a … Continue Reading

EU Parliament approves new EU-wide rules to protect whistleblowers

On 17 April, the European Parliament adopted new rules to protect whistleblowers. The rules are designed to encourage the reporting of breaches of EU law by offering to whistleblowers EU-wide protection from dismissal, demotion and other forms of retaliation in areas including public procurement, financial services, money laundering, product and transport safety, nuclear safety, public … Continue Reading

Mark Steward indicates it may be time for criminal prosecutions under the Money Laundering Regulations

In a recent speech, FCA Director of Enforcement and Market Oversight Mark Steward again made clear that the FCA is prepared to use its power to bring criminal proceedings for breaches of anti-money laundering (AML) obligations set out under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs … Continue Reading

UK Supreme Court clarifies issues on parent company liability in Lungowe v Vedanta

Summary This landmark judgment from the UK Supreme Court means that the claim brought by 1,826 Zambian villagers against UK-based Vedanta and its Zambian subsidiary KCM can proceed to a trial of the substantive issues in the English courts. One of the issues that now falls to be examined is the controversial question of whether … Continue Reading

Global Regulatory Enforcement and Sanctions Trends for 2019

In this on-demand webinar, members of our Regulatory, Compliance and Investigations team in London, France, the US and Hong Kong give their thoughts on likely regulatory enforcement and sanctions trends for the rest of this year based on recent enforcement cases and forward looking statements from the regulators. Topics discussed include individual accountability, anti-money laundering … Continue Reading

SFO to hit back on privilege in new cooperation guidance

In a speech earlier this week  Lisa Osofsky announced that the SFO will shortly publish guidance on its expectations in relation to self-reporting and cooperation. The speech suggested that waiver of privilege over internal investigations material will be seen by the SFO as a strong indicator of, if not a precondition to, cooperation for the purposes … Continue Reading