By William James and Sinead Cruise
LONDON (Reuters) -Firms that self-report suspected wrongdoing to Britain’s Serious Fraud Office (SFO) and co-operate with investigators will get a chance to avoid prosecution, according to guidance published by the SFO on Thursday.
The SFO, which has a remit covering complex financial crimes, fraud and corruption, said companies that flag potential breaches would be offered the chance to negotiate a Deferred Prosecution Agreement (DPA), except in exceptional circumstances.
Such agreements typically allow the accused to avoid prosecution unless they reoffend or violate other terms during the term of the agreement.
Prosecutors agree to suspend legal proceedings in exchange for the company agreeing to conditions such as fines, compensation payments and corporate compliance programmes.
“If you have knowledge of wrongdoing, the gamble of keeping this to yourself has never been riskier,” said SFO Director Nick Ephgrave.
The guidance details what the SFO will consider to be genuine cooperation, including the preservation of digital and hard copy records and early engagement with authorities.
Law firms gave the revised guidance a mixed reception, with some suggesting company boards will continue to grapple with the dilemma of self-reporting or waiting for the SFO to uncover fault.
“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,” said Andrew Smith, a partner at Corker Binning.
Lloyd Firth, a partner at WilmerHale, said companies will now be focused on precisely what ‘exceptional circumstances’ would exclude companies from being invited into DPA negotiations.
“The more radical approach for the SFO would be to guarantee that companies who did not voluntarily self-report would not be offered a DPA in any event. That would be brave but would transform corporate decision-making,” said Firth.
(Reporting by William James and Sinead Cruise; Editing by Cynthia Osterman and Muralikumar Anantharaman)
