UK top fraud fighter boosted by powers to prosecute top executives

31 January 2017 9:57am

12 May 2016. By Martin Coyle.

David Cameron’s move to make senior executives criminally liable for failing to prevent fraud and money laundering represents a timely boost for the UK’s top fraud fighter, David Green.

The British Prime Minister timed the announcement to coincide with the start of a global corruption summit in London today. Senior executives may face criminal prosecution for failing to prevent economic crimes within the organizations they run, under Cameron’s plans.

The changes, which would need to go through Parliament, are likely to be introduced via an extension to the legislation used to prosecute UK companies for bribery.

Senior officials already face prosecution if they can’t prove measures are in place to prevent bribes, under the UK Bribery Act. The law could be tweaked to include other crimes such as fraud and money laundering.

The move represents a U-turn for the Conservative government, which shelved plans to toughen the existing rules last year. At the time, Justice Minister Andrew Selous said the existing rules were sufficiently robust to punish wrongdoing.

Cameron’s move vindicates the country’s top fraud official David Green, who has repeatedly called for more powers to prosecute senior executives in large companies.

Green who heads the UK’s Serious Fraud Office said as recently as yesterday that the UK should toughen its legislation.

The prosecutor has been frustrated by the SFO’s difficulties in targeting crimes within large companies. It has been particularly hard to prove whether senior executives masterminded crimes, or pinpoint the origins of criminal behavior within companies.

In larger businesses, executives can be effectively insulated from prosecution due to firewalls that rogue employees are able to put in place to conceal wrongdoing.

Conversely, it is easier to prosecute individuals in smaller operations where it is easier to map who is accountable. This gap will likely be closed with the new powers.

If the plans are enacted, the onus will be on top executives to prove they took sufficient steps to prevent crimes during their watch. It will be much harder to hide behind claims that rogue employees acted alone.

	Eliot Gao