GT London Law Blog

GT London Law Blog

Legal Advisers for a Changing World

The Financial Conduct Authority – Part 2 – Criminal & Civil Insider Dealing

Posted in criminal law, FCA, Financial Conduct Authority, insider dealing, insider trading, White collar

In a February 2019 speech, the FCA’s Director of Market Oversight, Julia Hoggett, said the following:

The life blood of all well-functioning markets is the timely dissemination of information, without which effective price information cannot take place. The malignant form of that same life blood is the misuse or inappropriate dissemination of that information.

The ‘malignant form’ to which Ms Hoggett referred is insider dealing, where someone trades on the basis of information not known to the public in order to make a gain or avoid a loss, or where one discloses such information and/or encourages others to trade in relation to it.

Insider dealing and market manipulation were both key parts of Ms Hoggett’s speech, which is an important outline of what the FCA sees as the foremost issues for the firms it oversees. Ms Hoggett also referred to the FCA update to its ‘Financial Crime Guide’ for firms. A forthcoming GT Alert will address the updated guide and considerations for corporates flowing from insider dealing.

In this GT Advisory we focus on the definition of and defences to insider dealing in both the criminal and civil context, as well as the ways in which individuals in the UK have been pursued for such conduct.

To read the full GT Alert, click here.

I Smell a Rat: SFO Looks to Informants – Dangling the Carrot of Immunity?

Posted in criminal law, White collar

Lisa Osofsky, the new director of the UK Serious Fraud Office, says her agency should use insiders and co-operators to bring to life by way of live evidence the document-heavy cases it prosecutes.

Speaking to the Commons Justice Committee in December 2018, Ms Osofsky alluded to the slow pace of SFO investigations as one of the agency’s key criticisms and suggested that getting an ‘insider’ to help the SFO understand what was going on could be helpful in presenting cases to juries.

These comments are perhaps unsurprising from Ms Osofsky, who was previously a federal prosecutor and assistant general counsel to the FBI in the United States, where plea deals and immunity in exchange for testimony are more prevalent.

In a speech delivered earlier the same month, Ms Osofksy recognised that historically, cooperators in the UK have been used mostly in the context of gang-related and terrorism offences.

The statutory power to grant immunity and other protections can be applied in any type of case. Ms Osofsky has made clear that she and her SFO colleagues are ‘[intent on] exploring this area in the white-collar world’.

In this GT Advisory, we discuss the controversial history of ‘grassing’ in the UK and describe the process of obtaining immunity and other protections.

To read the full advisory, click here.

Brexit Brinkmanship

Posted in Brexit, International Law, International Trade

It is now less than two months until 29 March 2019, the date set for the UK’s withdrawal from the EU. At this late stage, the terms of the UK’s withdrawal have still not been settled, and the Brexit issue remains clouded in uncertainty.

As a result of a vote in the UK Parliament 29 January, the UK will now seek to renegotiate one of the terms of the withdrawal agreement agreed in draft with the EU at the end of 2018. This term is the “Irish backstop”, the dual purpose of which is to preserve an open border between Ireland and Northern Ireland post-Brexit and to guarantee the integrity of the EU’s post-Brexit borders. The EU’s initial reaction to the vote has been to indicate that it sees no reason to renegotiate. Without amendment to this term, however, the UK’s withdrawal agreement as a whole is very unlikely to receive the parliamentary approval required for it to become binding on the EU and UK.

Key points in light of these developments:

  • A no-deal Brexit on 29 March is still possible.
  • An extension to the 29 March Brexit date is also still possible.
  • Businesses should prepare for a no-deal Brexit.
  • The withdrawal agreement is not the final EU/UK agreement.

To read the full GT Alert, click here.

Top 5 Predictions for UK White Collar Defence in 2019

Posted in Brexit, criminal law, Government, International Law, White collar

What does 2019 have in store for white-collar defence in the UK? In this GT Alert, we list our top 5 predictions relating to Serious Fraud Office (SFO) Director Lisa Osofsky, who indicated various areas of focus for her tenure; Brexit and the potential loss of the European Arrest Warrant regime and the U.K.’s access to EU shared crime agency databases; U.K. criminal law and corporate criminal liability; litigation privilege in the context of an internal criminal investigation, and extraterritoriality in terms of the SFO’s power to compel overseas companies to produce material; and transatlantic collaboration – we expect an increasingly U.S. approach to the way the SFO operates.

To read the full GT Alert, click here.

The Financial Conduct Authority – Part 1 – Market Manipulation

Posted in criminal law, FCA, Financial Conduct Authority, spoofing, White collar

The term ‘market manipulation’ is a broad one which can mean a number of things.

In this GT Advisory, we consider how market manipulation is approached in the U.K. in both a civil and criminal context, and how it has been enforced by the U.K.’s Financial Conduct Authority (FCA). We also discuss spoofing, a tactic used by traders to gain an unfair advantage.

To continue reading, click here.

Failure to Prevent Tax Evasion: Forgotten, but Not Gone

Posted in criminal law, Tax, tax evasion, White collar

The new offences introduced by the Criminal Finances Act 2017 (the Act), although widely publicised in the months leading up to its commencement, have received little attention since from commentators and, seemingly, the enforcement authorities.

The two new offences govern U.K. and non-U.K. tax and are targeted at criminalising a corporate entity or partnership’s (broadly, a ‘relevant body’) failure to prevent the facilitation of tax evasion by persons acting for or on behalf of it, as an employee, agent, or a person performing services for or on behalf of the company.

To read the full GT Advisory, click here.

ECJ Confirms UK Can Withdraw Brexit Notice Unilaterally

Posted in Brexit, International Law, International Trade

The EU Court of Justice ruled today, 10 December, that the U.K. can unilaterally withdraw its “Brexit” notification to the EU. The ruling follows the advice of the advocate general to the EU Court last week, that the U.K. should be able to revoke the notification without the consent of the other 27 EU member states (see GT Alert, Brexit – Can the U.K. Stop Brexit Without EU Consent?).

Further, the U.K. parliament’s House of Commons vote on the draft EU withdrawal agreement, scheduled for 11 December, was today postponed by Theresa May to allow time to secure additional reassurance from the other 27 EU member states in relation to the Irish backstop, which she recognizes is the main obstacle to securing parliamentary approval of the draft agreement, but at the same time a necessary part of any withdrawal agreement.

To read the full GT Alert, click here.

Brexit – Can the UK Stop Brexit Without EU Consent?

Posted in Brexit, International Law

Advice given to the EU Court of Justice on Tuesday, 4 December recommends that the Court’s judges rule that the U.K. can withdraw its March 2017 notice of intention to leave the EU without the consent of the other 27 EU member states. The advice also recommends that this unilateral right to withdraw the notice should be subject to certain conditions.

The advice is the latest, but not the final, step in a landmark case brought by campaigners before the Scottish Court of Session. Since the case concerns the interpretation of EU law – Article 50 of the EU Treaty, which sets out how a member state may leave the EU – the Scottish Court asked the EU Court for a preliminary ruling. This ruling will be made by the EU Court at a future date that has not yet been publicised, although the Court has expedited its process.

Continuing Reading.

Prove It or Lose It! Part III: A Step Too Far? Account Freezing Orders & Account Forfeiture Orders

Posted in criminal law, White collar

Part III of our series on asset recovery powers available to UK law enforcement authorities focuses on new powers under the Criminal Finances Act 2017 to obtain orders to freeze bank accounts and apply for forfeiture orders, permanently depriving the account holder of the funds contained in the account.

These draconian new powers have received little publicity and contain fewer safeguards than unexplained wealth orders and the civil recovery process under the Proceeds of Crime Act 2002 (POCA), discussed in Parts I and II of this series. The powers are controversial and, unlike other asset recovery powers available to UK enforcement authorities, applications are made in the magistrates’ court rather than the High Court.

To read the full GT Alert, click here.