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SFO Director hints at potential changes to tackling serious fraud caseloads

Businesses should take note following indications by the UK’s Serious Fraud Office (SFO) that it intends to utilise existing but less commonly used powers to grant immunity notices to offenders who assist in its cases and support reduced sentences to defendants who provide evidence to enable other prosecutions, an expert has said.

It follows a speech from Nick Ephgrave, the newly appointed director of the SFO, at the Royal United Services Institute. In his speech, Ephgrave expressed his commitment to the SFO’s mission and acknowledged the challenges posed by fraudsters in the modern world. The speech also marked a reset in how the SFO will be going about its business, said Neil McInnes, criminal law expert at Pinsent Masons.

McInnes added that the SFO director’s speech included several notable themes businesses should take on board in relation to how the most serious financial crime investigations could be handled by the agency in future.

First, the director gave “a clear indication that the SFO will be looking at greater opportunities to use existing powers under the Serious Organised Crime and Police Act 2005 (215 pages / 6.7 MB) that relate to offenders prepared to assist with SFO investigations and prosecutions,” he said. “Similar types of immunity provision are routinely part of US prosecutor’s toolbox but have rarely been considered for UK cases involving serious fraud and corruption – this may now change,” McInnes added.

Secondly, McInnes said that Ephgrave has “come out in favour of financial incentives for whistleblowers, departing from previous SFO orthodoxy.” While this would require legislative changes, given ongoing reviews of whistleblowing protections more widely “the SFO director’s intervention in the debate is significant in its timing,” McInnes added.  

A further important issue raised in the speech is that closer liaison between the SFO and the police should also be expected, McInnes said, leaning into Nick Ephgrave’s background as one of the Metropolitan Police’s most senior officers. Practically, this may include the SFO “borrowing” more from police investigative strategies to change the way in which it approaches certain cases and to allow it to quicken the pace of enforcement. The use of covert surveillance powers was flagged by the SFO Director in his speech as a prime example of where more emphasis may be added in this area.

In line with aims to make investigations more time efficient, Ephgrave also stated he plans to introduce a new review process on active cases to make them more focused and also referenced the number of dawn raids the agency had already conducted since he assumed office.

Hinesh Shah, forensic accountant at Pinsent Masons, said: “The need for speed is a recurring theme in the director’s speech, with great emphasis placed on speeding up case progression and making swifter decisions.”

Shah described it as “encouraging” that Ephgrave also alluded to future investment into technology and systems. “Smart investment in technology, particularly those that can make disclosure exercises more efficient, will, in the longer term, free up funds for the SFO to invest in other priority areas, such as creating an attractive working environment and other capabilities it wants to bolster,” he said.

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