Serious Fraud Office to let firms avoid prosecution if they flag up suspected crime
The Serious Fraud Office (SFO) has said it is prepared to let companies avoid prosecution if they self-report suspected financial crime and cooperate with investigators, in an important change to its previous guidance.
The SFO, which investigates complex financial crimes, fraud and corruption, said companies that flag potential breaches would be offered the chance to negotiate a 'deferred prosecution agreement' (DPA), apart from in some 'exceptional' circumstances.
These agreements usually allow the accused to avoid prosecution, unless they reoffend or violate other terms during the agreement. Under DPAs, prosecutors agree to suspend legal proceedings in exchange for the company agreeing to conditions such as fines, compensation payments and corporate compliance programmes.
Previously, companies that self-reported to the SFO still ran the risk of a criminal conviction. The new guidance aims to make it more likely that businesses will step forward to report suspected wrongdoing.
Nick Ephgrave, the SFO director, said: 'If you have knowledge of wrongdoing, the gamble of keeping this to yourself has never been riskier.'
The anti-fraud agency said genuine cooperation would include the preservation of digital and hard copy records, and early engagement with authorities. If a company self-reports, the SFO has said it will respond with 48 hours, decide on whether to open an investigation within six months, and conclude any DPA within six months of starting negotiations.
However, legal experts have warned it would still be difficult for companies to decide whether to self-report or wait for the SFO to uncover a problem.
Andrew Smith, a partner at the law firm Corker Binning, said: 'Mr Ephgrave warns companies against trying to bury their skeletons. But in the unlikely event those skeletons are discovered by the SFO, simply pleading guilty can be a more attractive outcome than an earlier self-report.'
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Ephgrave, a former Metropolitan police officer, joined the SFO as director in 2023. In October he said he wanted to improve incentives for individuals who help the SFO, such as paying whistleblowers in a US-style approach.
In recent years, the agency has faced a series of big failures in some of its most high-profile cases, such as a failed prosecution of ex-Barclays directors in 2020, the collapse of a trial of ex-Serco executives, and the failure of a decade-long investigation of the mining company ENRC.
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