GT London Law Blog

GT London Law Blog

Legal Advisers for a Changing World

‘Above & Beyond’? Serious Fraud Office Issues Corporate Co-Operation Guidance – Part I

By Anne-Marie Ottaway, Barry Vitou and Gareth R. Hall on Posted in Corporate, criminal law, GT Alert, Serious Fraud Office, sfo, White collar

The UK Serious Fraud Office (SFO) has issued its long-awaited guidance on corporate co-operation. For the first time in one place, the SFO has set out what in its view are ‘indicators of good [co-operation] practice’ for companies under investigation. This is a helpful clarification.

In its own words the SFO defines co-operation as going ‘above and beyond’.

The list of indicators of good co-operation practice is extensive and not, as the SFO itself points out, exhaustive. That said, the SFO acknowledges that each case turns on its own facts, and some indicators on the list may not apply in some cases, perhaps hinting at a little flexibility depending on specific circumstances.

Companies dealing with the SFO and/or identifying suspected wrongdoing in their organisation must therefore carefully consider the guidance and determine whether and/or to what extent they can meet the SFO’s co-operation requirements.

Companies should also review existing policies and procedures dealing with internal investigations in light of the new SFO guidance.

Click here for the full GT Alert, ‘Above & Beyond’? Serious Fraud Office Issues Corporate Co-Operation Guidance – Part I, in which our London White Collar team outlines the key takeaways from the guidance.

Beware of Strangers Bearing Gifts: UK ‘Business Integrity Initiative’ Aims to Support the Anti-Corruption Efforts of SMEs

By Gareth R. Hall, Anne-Marie Ottaway and Barry Vitou on Posted in Bribery Act 2010, Corporate, criminal law, Government, GT Alert, International Trade, National Crime Agency, Serious Fraud Office, sfo, White collar

The UK government’s Anti-Corruption Newsletter for Summer 2019, supported by ‘Anti-Corruption Champion’ John Penrose, MP for Weston-super-Mare, covers the latest developments in anti-corruption over the last quarter.

Two reported highlights illustrate the government’s steadfast approach to issuing new statutory guidance for both large corporates and small UK businesses. However, the latter category could receive subsidised anti-bribery advice through the ‘Business Integrity Initiative’ to ‘help’ improve compliance.

But is the Business Integrity Initiative really a proverbial olive branch?

Click here for the full GT Alert.

Brexit: Can the Remainers Stop a No-Deal Brexit?

By Gillian Sproul on Posted in Brexit, EU Withdrawal Agreement, GT Alert, No-deal Brexit

Brexit has driven fault lines through British politics as seen at no time since the 1680s. Fervent ‘leavers’ and fervent ‘remainers’ can be found in both of the main political parties, although most favour various compromise options in between.

This is reflected in the composition of the UK Parliament and has resulted in an impasse, with Parliament rejecting both the transitional ‘deal’ to leave the EU negotiated by former Prime Minister Theresa May at the end of 2018 and the prospect of leaving the EU without a deal – a ‘no deal’ Brexit. The election of Boris Johnson as the new UK prime minister and his appointment of a government leaning firmly towards leaving the EU, with or without a deal on October 31, 2019, throws up some distinctive legal challenges: If a new deal cannot be struck with the EU, is a no-deal Brexit inevitable, or can the remainer MPs stop it?

Click here for the full GT Alert, which explores Prime Minister Johnson’s options, the two legal routes open to remainer MPs, and more.

The Serco Deferred Prosecution Agreement: A Lesson in Pragmatism

By Anne-Marie Ottaway, Barry Vitou and Gareth R. Hall on Posted in criminal law, Deferred Prosecution Agreement, GT Alert, Serious Fraud Office, sfo, White collar

On 4 July 2019 at Southwark Crown Court, Mr Justice William Davis formally approved the fifth Deferred Prosecution Agreement (DPA) entered into by the UK’s Serious Fraud Office (SFO). The SFO’s latest DPA is with Serco Geografix Limited (SGL), a now-dormant subsidiary of Serco Limited (SL), and marks the end of a six-year investigation which started in November 2013 when the Ministry of Justice (MoJ) reported concerns about its contract with SL for the supply of electronic monitoring equipment, i.e., ankle tags, used to monitor individuals accused or convicted of criminal offences.

According to the judgment, while the investigation ‘revealed no evidence of any dishonest or fraudulent activity’ in respect of the original concerns, Serco Group PLC, the ultimate parent, in reviewing material thought to be relevant to those concerns, discovered emails which appeared to show there had been manipulation of accounting between SGL and SL designed to artificially reduce the profit margins reported to the MoJ, giving rise to a potential fraud on the public purse. It was this discovered conduct which ultimately led to the DPA.

The judgment raises some interesting points of law and practice. In this GT Alert, we consider the facts and analyse the features of this latest UK DPA, the first under new SFO Director Lisa Osofsky. We also discuss how a dormant company is able to pay significant financial penalties and costs and satisfy positive obligations to improve internal procedures (the answer is that, effectively, it doesn’t).

Click here to read the full GT Alert.

2 Intent-to-Fine Notices in 2 Days by UK Information Commissioner for GDPR Violations; Amounts Total £282 Million

By Anne-Marie Ottaway, Barry Vitou, Gareth R. Hall and Ewen Mitchell on Posted in Cybersecurity, Data Privacy, GDPR, GT Alert, White collar

It has been over a year since the General Data Protection Regulation (GDPR) came into force – and it did so with great fanfare. The GDPR had the effect of overhauling how personal data is dealt with across Europe, introducing the ‘gold standard’ of protection for the rights and freedoms of EU data subjects. At the same time the UK enacted the Data Protection Act 2018 (DPA).

By far the most radical change implemented by the GDPR over the previous regime was giving supervisory authorities the power to impose potentially huge fines for breaches of its provisions.

The level of fine that can be imposed depends on the nature and seriousness of the failure. GDPR Article 83 provides that in the case of a firm or company breaching the obligations imposed on it, such as the basic principles for processing personal data, the maximum fine available to the Information Commissioner’s Office (ICO) is €20 million or 4% of the firm or company’s total annual worldwide turnover, whichever is higher.

Unsurprisingly, the potential for such huge fines created a media furore not only in the UK but also internationally. It is only this month, however, that the ICO publicly announced its first uses of the significant firepower available to it.

Click here for the full GT Alert, which discusses the two cases.

Brexit Update: Impact of New UK Prime Minister

By Gillian Sproul on Posted in Brexit, GT Alert

The UK’s new prime minister, Boris Johnson, will take office on 24 July 2019, just over three months before the UK is due to leave the EU, on 31 October 2019.

When the UK voted to leave the EU in June 2016, few predicted that Brexit would not yet be achieved over three years later. But repeated failure to gain UK parliamentary approval of the draft withdrawal agreement terms negotiated by then-Prime Minister Theresa May in late 2018 resulted in the original 29 March 2019 Brexit date being postponed to the current 31 October 2019 deadline. This failure also led to Theresa May announcing her intention to stand down as leader of the governing Conservative Party and as prime minister.

To read the full GT Alert, click here.

For more on Brexit, click here.

Greenberg Traurig Tops The Lawyer’s US Top 50 Diversity List

By Greenberg Traurig on Posted in Awards, Diversity

Magazine: “the only firm in the US Top 50 to record a female partnership proportion in the UK of more than 40%”

LONDON – 9 July 2019 – Global law firm Greenberg Traurig, LLP has been recognized as the top U.S. firm in the U.K. for diversity by The Lawyer magazine. According to the publication’s U.S. Top 50, Greenberg Traurig “is the only firm in the U.S. Top 50 to record a female partnership proportion in the U.K. of more than 40 percent.” Fourteen of the 34 shareholders in its London office are women.

According to The Lawyer, across U.S. firms in the U.K. the number of female partners has risen 8.4% since 2017. In the last year, through promotion and recruitment, Greenberg Traurig has increased its female partners from 37.9% to 41.17%.

Earlier this year, Greenberg Traurig, LLP announced the elevation to shareholder of 32 attorneys from 17 offices, practicing in 13 areas of law. The 2019 shareholder class was comprised of 44% women and 28% minorities, meaning that women, ethnic minorities, and LGBTQ+ attorneys made up 50% of its attorneys elevated to shareholder.

“Greenberg Traurig is proud of its bold approach to diversity and inclusion – one that is part of our origin story as well as our legacy going forward,” said Fiona Adams, the Managing Shareholder of the London office and the Co-Chair of the firm’s Global Corporate Practice.

Other recent diversity rankings for Greenberg Traurig include the following from The American Lawyer/National Law Journal 2019 Diversity, Women’s & LGBT Scorecards: No. 1, Number of African American Partners and Attorneys Overall and Number of Hispanic American/Latino Partners and Attorneys Overall; No. 5, Number of LGBT Partners; No. 6, Number of Minority Attorneys; No. 6, Number of Female Partners; and No. 7, Number of Asian American Partners Overall.

About Greenberg Traurig’s Diversity Initiative: From its inception, Greenberg Traurig has been committed to diversity and inclusion in the workplace. Greenberg Traurig is a uniquely empowering and diverse firm built on a foundation of fairness, equality, and authenticity. The firm’s efforts have been recognized by local, national, and global publications and organizations including, Chambers and Partners.

About Greenberg Traurig, LLP: Greenberg Traurig, LLP (GT) has more than 2100 attorneys in 41 offices in the United States, Latin America, Europe, Asia, and the Middle East. GT has been recognized for its philanthropic giving, diversity, and innovation, and is consistently among the largest firms in the U.S. on the Law360 400 and among the Top 20 on the Am Law Global 100. Web: www.gtlaw.com Twitter: @GT_Law.

M&A Deal Flushes Out Bribery Scheme Leaving Seller Director with a Multi-Million Pound Hangover and Jail Time

By Anne-Marie Ottaway, Barry Vitou and Gareth R. Hall on Posted in GT Alert, Serious Fraud Office, White collar

On 30 May 2019 the SFO issued a press release announcing that Carol Ann Hodson, the former director and owner of a company named ALCA Fasteners Ltd (ALCA), pleaded guilty to paying bribes amounting to £300,000 in order to secure contracts worth £12m. The bribes were paid to purchasing manager1 of a German company over the course of five years and, according to a Serious Fraud Office (SFO) press release, the bribes were paid monthly in cash instalments and on one occasion, Ms Hodson sent jewelry in a brown envelope to the purchasing manager.

Ms Hodson pleaded guilty at her first appearance at Walsall Magistrates’ Court.  Pleading at this stage (at the first opportunity) meant that she would have received a one-third discount, off of her sentence.

1 The purchasing manager, Terje Moe, pleaded guilty on 6th July 2018 in Norway to two charges relating to the receipt of bribes.

To read the full GT Alert, click here.

Roll Up, Roll Up: ‘Cannabis Inc.’ Is Open for Business, but UK Investors Must Wait Their Turn

By Barry Vitou, Anne-Marie Ottaway and Gareth R. Hall on Posted in cannabis, criminal law, Proceeds of Crime Act, White collar

With the U.S. cannabis market reported to be worth around $10 billion, sales in Canada expected to reach $6.5 billion by 2020, and the UK having recently decriminalised the use of the drug for medicinal purposes, UK-based investors are eyeing the potential for profit from this new business area.

Click here to read the full GT Advisory, where we consider what UK criminal laws will apply in this new, complex, and evolving area.

Money Grows on Trees for Local Council Pursuing Home Improvement Enthusiasts and Local Football Club Fundraiser

By Anne-Marie Ottaway, Barry Vitou and Gareth R. Hall on Posted in criminal law, GT Alert, Proceeds of Crime Act, White collar

It is widely thought that proceedings under the Proceeds of ‘Crime’ Act, such as confiscation, are intended to obtain the money someone makes from committing a crime. So, the thinking goes, if a person is convicted of fraud having made £100,000 from the crime, then those funds can be confiscated by the courts.

While this basic premise is correct, UK money laundering laws are far broader in their application and are increasingly being used by UK authorities in innovative ways. Real estate matters in particular are receiving attention from UK local authorities.

For example, one innovative local authority has appointed surveyors to determine the increase in property value following illegal tree pruning and felling. The result, in addition to relatively nominal fines, is that courts have imposed significant – and some would argue punitive – confiscation orders.

Case 1 – The Ole Oak Tree…

The first case involves a 42-foot oak tree covered by a Tree Preservation Order (TPO) located in the back-garden of a Mr Samuel Wilson’s home in Canford Cliffs, Dorset.

A TPO is an order made by a local authority to protect trees and woodland. A person who contravenes a TPO is guilty of a criminal offence, and if found guilty, can expect to pay a fine of up to £20,000.

In 2016, Mr Wilson decided to cut a number of branches off the oak, which was casting a shadow over a Juliet balcony he had recently added to his £1 million home. After his neighbour contacted the local authority, Mr Wilson was prosecuted for cutting branches from the tree in violation of the TPO. He pleaded guilty to causing willful damage to a protected tree and was fined £1,200.

Following conviction, Poole Borough Council pursued Mr Wilson in confiscation proceedings. The council’s valuation experts said cutting the tree’s branches increased Mr Wilson’s home value by £21,000.

Three years after the original conviction, Mr Wilson was ordered to pay £15,000 in legal costs plus the £21,000 additional home value under UK money laundering confiscation provisions.

Activity     Pruning of one oak tree
Fine       £1,200
Costs   £15,000
Confiscation    £21,000
TOTAL COST £37,200 (plus one criminal conviction)

Click here to read the full GT Alert, which includes additional cases of confiscation orders under the Proceeds of Crime Act.