SFO will not dilute its approach following criticism, says Green

* Any views expressed in this article are those of the author and not of Thomson Reuters Foundation.

By Martin Coyle The Serious Fraud Office will not dilute its approach or resort to "eye-catching" prosecutions following recent criticisms of the organisation, according to David Green, the SFO's new director. Green acknowledged the tough time the body had had recently but stressed that the prosecutor was not going away, although he did acknowledge that the SFO needed to change its approach. "The SFO's role needs restating. I am convinced that the SFO must focus on top-level fraud and cases that undermine confidence in UK plc," he said. "The SFO is here to stay, but like other organisations we must prove ourselves," he told the C5 Anti-corruption Conference in London yesterday. Green, who replaced Richard Alderman in April, told delegates that the SFO would resist any attempts to "dilute" its approach and said that it would not chase "eye-catching" quick prosecution results or take "short cuts" in its approach. The conference heard that the organisation would continue to prosecute serious bribery and corruption cases as well as those with a strong public interest dimension; it would not look at minor cases. Criticism The director said that the SFO needed to restate its role as a crime fighter but that it was "here to stay", despite the criticism, both fair and unfair, which had been levelled against the embattled organisation in recent months. The SFO was criticised in particular for its botched investigation into property tycoon brothers Vincent and Robert Tchenguiz. The pair were arrested in March last year following high-profile dawn raids on their homes and offices. This month the SFO dropped its investigation into Vincent, admitting there were no longer reasonable grounds to prosecute him. Its investigation into Robert's involvement in the demise of Iceland bank Kaupthing continues. Judge John Thomas said the SFO had been "incompetent" in its investigation into the brothers. Green described as "nonsense" recent media reports which had suggested that the SFO faced a "stark choice" between set-piece investigations and negotiated civil settlements. "The SFO will be surgical in its approach and will focus on the core of criminal conduct," he said. The SFO would focus on those cases where its impact would be greatest, he added. Green gave his backing to government proposals, currently under consultation, to introduce deferred prosecution agreements in the UK. "We will strive for access to the broadest possible prosecution tools. We will not be out-gunned," he said. Turning to the issue of companies self-reporting wrongdoing, Green acknowledged the problems the SFO had had in trying to broker judicial settlements with firms. He said that corporates needed to see the advantages of reporting internal issues and had to be incentivised to make reports. He warned that it was not a "get out of jail free card", however. "A corporate who self-reports can't be given a guarantee in advance that they won't be prosecuted … no prosecutor would do that. [However] if a prosecution isn't in the public interest … then prior to a deferred prosecution agreement the SFO will likely seek a civil resolution," he said. He added that firms that did not self-report and were subsequently investigated by the SFO would receive little sympathy. Green encouraged individuals to become whistleblowers and said he welcomed the debate on whether people should be rewarded for giving information that led to successful prosecutions. Such an approach would be very like that taken in the U.S., where informants can receive up to 30 percent of any successful settlement arising from whistle-blowing. The SFO has recently faced criticism that it had cut back on its dawn raids since the Tchenguiz debacle. Green told delegates that dawn raids were not the only way the SFO could obtain evidence to build cases. "They are not a barometer for our activity," he said. Reorganisation The SFO is set to be reorganised under Green's tenure; the body will have four case teams, which between them will focus on fraud and bribery and corruption. The teams will have divisional heads, and there will be a general counsel to advise on prosecutions. Green said the SFO planned to use more open-source information in its investigations, as well as suspicious activity reports (SARs). He added that the organisation would look to the private sector and bring in lawyers on secondment to bolster its capabilities. He said he wanted to foster a "revolving door" policy with the commercial sector. "It's time for the private sector to put its money where its mouth is," he said. Green revealed that the SFO was working on four self-referral cases as well as 11 other cases that are mainly bribery and corruption cases. "We will take the right cases at the right time," he said. Robert Amaee, of counsel at Covington & Burling and a former senior SFO official, welcomed Green's comments but said that the SFO would need to take its time to build up a caseload. He added that the agency would be "constrained" by budget cuts that have seen the SFO's funding cut by about £20 million in recent years. He welcomed the reorganisation at the SFO but said much would depend on the staff Green recruited to fit into the new structure. Amaee said it was likely that the first SFO prosecution under the Bribery Act 2010 would be a "clear-cut case" and not a "grey area" one involving gifts and hospitality, for example. Karolos Seeger, a partner at Debevoise & Plimpton, said he was encouraged that the SFO intended to use the full panoply of prosecution tools available but said that the industry needed test cases to see how the Bribery Act developed. He said that the SFO's bid to get more companies to self-report would not work unless the SFO was handed deferred prosecution agreement tools. "The Bribery Act will continue to be the poor relation of the U.S. Foreign Corrupt Practices Act without deferred prosecution agreements."