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Ground-Breaking Serious Fraud Office Deal Wins High Court Approval

In the first case of its kind, the High Court has approved a US-style deal by which a bank accused of having inadequate systems in place to guard against bribery will escape prosecution if it cooperates fully with the Serious Fraud Office (SFO).

The bank was said to have failed to take adequate measures to prevent 1 per cent of $600 million raised by an African government being skimmed off as a bribe. Although it was not suggested that the bank, or any of its employees, had knowingly participated in an offence, the SFO said that it had a reasonable suspicion that the inadequacy of the bank’s systems amounted to an economic crime under the Bribery Act 2010.

Faced with the SFO inquiry, the bank had agreed to pay $6 million in compensation, plus interest, to the affected government. It had also agreed to give up the $8.4 million profit it made on the deal and to pay a financial penalty of $16.8 million. It had undertaken to cooperate in full with the SFO and, at its own expense, to submit to an independent review of its internal anti-corruption controls.

In those circumstances, the Court approved a deferred prosecution agreement (DPA) arrived at between the bank and the SFO under the Crime and Courts Act 2013. Under the terms of the DPA, an indictment against the bank would be suspended and the prosecution dropped after three years.

The discontinuance of the prosecution was dependent on the bank’s continued cooperation and it would have no protection in respect of any matters on which full disclosure had not been provided prior to the agreement, nor in respect of any information provided which it knew or ought to have known was inaccurate, misleading or incomplete. In those circumstances, the Court was content to approve the DPA as fair, proportionate and in the interests of justice.