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Fraud prosecutor in hunt for more accountants

David Green, Director of the Serious Fraud Office, has called on more accountants to join him in the fight against the top tier of complex fraud, bribery and corruption.

Speaking at ICAEW’s Forensic and Expert Witness Group annual conference, Green called for more forensic accountants to join his organisation, adding that he has addressed salaries in order to attract more qualified accountants into its ranks.

He said, “We are looking to attract high quality staff, and I wish we could attract more accountants. If an accountant were to join us for two to three years, it would be good for their CVs and it would be very good for the SFO.”

Legal aid impact

Green also noted how defendants in complex fraud cases could afford to defend themselves after cuts in legal aid had caused a number of barristers to refuse work at new lower rates.

Responding to a question from Gavin Pearson, a Partner at HSNO and ICAEW’s Forensic and Expert Witness Group Chair, the SFO director said during his time as a barrister in the past he had seen that some people had been “over ambitious” over their legal aid claims. So it was not surprising that there would be cuts, but now the pendulum may have swung “too far” in the opposite direction.

“People need the assistance of experts, particularly in complex fraud cases where they need both legal and accountancy experts. The state has got to be realistic about the sort of assistance that is required,” he said. “But value for money needs to be considered in the context of the need for fair trials and just outcomes.”

Blockbuster funding

Green set out how funding of the UK’s major fraud prosecuting agency had improved in recent years, including “blockbuster” funding so that the SFO would never have to turn down a case due to a lack of funds.

Earlier, Green took the opportunity to emphasise that the SFO would stick to the work for which it was designed, and that there would be no “dumbing down” of the service. When asked about the criteria used to judge whether a case was suitable for the SFO to take on, Green said that he rejected “ a purely numerical approach”, and instead focused on “conduct that undermines UK ‘financial and commercial PLCs’ in general and the City of London in particular”.

He added that it was impossible to define exactly the criteria by which a case is referred to the SFO but “like an elephant, we know it when we see it”.

Recent successful prosecutions

  • Magnus Peterson, the former head of collapsed hedge fund Weavering Macro Fixed Income Fund, who was sentenced to a total of 13 years in prison.
  • The Sustainable Agro Energy case, the SFO’s first conviction of individuals under the Bribery Act, which secured three convictions of people behind a £23m investor fraud.
  • The first contested convictions of individuals for foreign bribery that the UK has ever secured when senior executives of Innospec received custodial sentences for their part in directing the bribery of Indonesian officials in the leaded fuel industry.
  • The first contested convictions of a corporate for foreign bribery that the UK has ever secured: Smith & Ouzman, concerning that company's security printing business in Africa; bribes again paid to public officials to win that work.
  • The conviction of Chris Ronnie, the former chief executive of JJB Sports, and two of his associates.

Green also pointed to the conviction of Tom Hayes, a ringmaster in the manipulation of Libor, who received a 14-year custodial sentence in August. Green observed that the sentence showed that bankers are subject to the same standard of honesty as the rest of us: “This sentence was a good result for the City and for the banking and financial sector”.

Live investigations

He added that the list of live investigations shows that the SFO continued to target the top tier of complex fraud: Rolls Royce, GlaxoSmithKline, Alstom, Global Forestry Investments, FOREX manipulation, Tesco, Somah Oil & Gas, and Quindell were just some of the investigations in the public domain, with others that could not be publicly mentioned adding to the workload. “And in an indication of the scope of our ambition, we are even investigating the Bank of England over the conduct of liquidity auctions,” he said.

Judge us by our results,” he told delegates at the conference.

Philip Smith

Philip Smith (@philsmithmedia) is a freelance journalist who writes for a number of accountancy and tax publications.

Forensic and Expert Witness Group, November 2015