New SFO director will leverage compliance officers’ expertise

Compliance officers, take note: The U.K. Serious Fraud Office will be depending on your expertise to help the agency fight economic crime. 

In her first public remarks as director of the SFO—just one week into the job—Lisa Osofsky laid out her priorities for the agency in the coming months and provided compliance officers and in-house counsel a glimpse into what the SFO will be expecting from them as well. Her remarks came in a keynote address Sept. 3 at the 36th Cambridge Symposium on Economic Crime. 

Of relevance to the compliance profession, Osofsky noted that her former experience working with compliance officers allowed her to witness first-hand their developing skill sets and increasing areas of responsibility “that has led to development of intel … to ensure the financial institutions and companies they help manage do not violate the law in areas like money laundering, sanctions, corruption and fraud. I aim to leverage the information they hold to help us in law enforcement build strong cases,” Osofsky said. 

The Joint Money Laundering Intelligence Taskforce (JMLIT) is just one example of how the private sector—the financial services industry, in particular—can work collaboratively with U.K. law enforcement bodies to tackle economic crime. Established in 2016, the JMLIT was established in partnership with the financial sector to combat money laundering. 

The taskforce is a partnership between government, regulators, law enforcement, and more than 40 U.K. and global banks—including vetted staff from Barclays, BNP Paribas, Citigroup, Deutsche Bank, JPMorgan, HSBC, Lloyds, RBS, Santander, and Standard Chartered. Between May 2016 and March 2017, the JMLIT successfully: 

Instigated more than 1,000 bank-led investigations into customers suspected of money laundering;

Identified more than 2,000 accounts previously unknown to law enforcement;

Closed more than 450 bank accounts suspected of being used for the purposes of laundering criminal funds; and 

Resulted in the heightened monitoring by banks of more than 400 accounts. 

In her remarks, Osofsky said she further wants to leverage the expertise of the legal sector. “Lawyers, solicitors, and barristers have a lot to offer in fighting crime, and I intend to reach out to seek their input and ideas,” she said. “The same is true for academics—I want to make use of new ideas and approaches that are out there.”

Cross-border cooperation

Osofsky’s former experience as Special Attorney in the Fraud Section of the U.S. Justice Department’s Criminal Division, and as deputy general counsel and ethics officer for the Federal Bureau of Investigation, will serve her well in her new role. What this translates into for the compliance and legal profession are more global settlements.

“The SFO will want assurance that companies are doing everything they can to ensure the crimes of the past won’t be repeated long after the watchful eye of the prosecutor moves on to another target.”
Lisa Osofsky, Director, Serious Fraud Office

“Cases are becoming increasingly multijurisdictional and complex, so cooperation to achieve global settlements like Rolls-Royce are ever more important,” she said. “Strengthening and deepening the relationships that make this happen is going to be a major focus for me.” Osofsky is referring to the $800 million global resolution that Rolls-Royce reached with authorities in the United States, the United Kingdom, and Brazil last year. 

In response to fears that the SFO would merge with the National Crime Agency (NCA), Osofsky affirmed that the SFO would maintain its independence from the NCA. “I started a five-year term with the attorney general’s support and commitment to maintaining the independence and prominence of this organization. That’s the basis on which I took this job and what I expect to find throughout my tenure.”

SFO and AI

The SFO intends to build on its strategic use of cutting-edge technology to make charging decisions faster. One way the SFO is working to expediate investigations, for example, is through its use of artificial intelligence and technology. 

“We’ll soon bring a range of machine-learning and AI-based technology-assisted review features to our investigations,” Osofsky said. “This should create even greater efficiencies and potentially help us reach charging decisions sooner and shorten the time it takes to progress to trial.”

“Our cases are some of the most complex and data-heavy criminal investigations in any jurisdiction,” she said. She cited the SFO’s investigation into Rolls Royce as an example, which involved 30 million documents—the largest case at the time. Now, the SFO is investigating one case involving over 65 million documents, with another in the pipeline involving more than 100 million documents, she said. In comparison, the Panama Papers leak concerned a meager 10.5 million documents—an average-sized investigation for the SFO today.

Furthermore, the SFO will be working closely with the newly established National Economic Crime Centre (NECC) within the NCA, which will “plan, task, and coordinate operational responses across agencies bringing together the U.K.’s capabilities to tackle economic crime more effectively,” the NCA said on its Website. 

“Supported by enhanced intelligence and analytical capabilities, it will draw together expertise from across law enforcement agencies, government, and the private sector,” the NCA said. The NECC, which will officially begin its work on Oct. 31, will include representatives from the SFO, City of London Police, Financial Conduct Authority, the Home Office, Crown Prosecution Service, and HM Revenue & Customs.

Deferred prosecution agreements

Another core message from Osofsky was that the SFO will continue its use of deferred prosecution agreements (DPAs). “I intend to build on our successes with taking on and cracking the most complex and difficult crimes and bringing these cases to trial or, if appropriate—if in the public interest—to resolution through DPAs,” she said.

When deciding whether a case qualifies for a DPA, she said, the SFO will assess whether the company has “a credible and colorable defense” under Section 7 of the Bribery Act (Adequate Procedures).  Factors the SFO will consider include, for example, whether the company engaged in proactive efforts to clean house and remediate; whether the company has instilled the right controls; and whether these efforts are demonstrated by senior-level commitment. Compliance officers and in-house counsel will want to study the DPA that Rolls-Royce entered with the SFO last year as an example.

Said Osofsky: “The SFO will want assurance that companies are doing everything they can to ensure the crimes of the past won’t be repeated long after the watchful eye of the prosecutor moves on to another target.”