UK’s Serious Fraud Office undermined by ‘unlimited resources’ of businesses – report

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The Serious Fraud Office’s fight against economic crime is being undermined by a lack of funding and the “unlimited resources” of the companies it is investigating.


Some companies under investigation are spending up to ten times more than the SFO on legal and investigation fees, according to the Times, citing a report by the Bureau of Investigative Journalism.


The anti-fraud agency, which has a GBP52mln annual budget, has dropped 30 investigations since 2018, the report said.


“There’s a chronic weakness in the enforcement of serious fraud in the UK,” Lisa Nandy, the shadow foreign secretary, said. “The odds are stacked in favour of those who break the rules, rather than those who make them.”


Robert Buckland, the Conservative MP and former justice secretary, who was responsible for the SFO as solicitor-general between 2014 and 2019, said the “imbalance in arms” between defendants and the SFO must be tackled.


“A situation where one side has unlimited resources cannot be fair,” he said.


In January, the SFO dropped its case against British American Tobacco PLC (LSE:BATS), after spending 18,000 hours over three years investigating the company, saying there was insufficient evidence for any prosecutions.


A joint investigation by the Bureau of Investigative Journalism and the BBC’s Panorama programme revealed evidence of the company paying informants for intelligence on competitors.


High staff turnover may also have weakened the agency, Buckland said. “Constantly having to shed staff and then rehire them doesn’t provide the continuity that prosecuting complex cases needs.”


In the past three years, more than three quarters of the SFO’s departmental heads and senior leaders have left and many have joined top City law firms.


Departees include Ben Morgan, joint head of bribery and corruption, who, in his new role as a partner at Freshfields Bruckhaus Deringer, is understood to have helped to negotiate a deferred prosecution agreement on behalf of security firm G4S (LSE:GFS) last year, the report said.


It said there is no suggestion any of these individuals advise on the same matters for the regulator and the company being investigated.

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