Hannah von Dadelszen, the U.K. Serious Fraud Office (SFO) joint head of fraud, has some useful insight into how a company should engage with the SFO if it chooses to self-report misconduct.
Companies have “two broad choices,” von Dadelszen said in remarks on Nov. 9 at the Pinsent Masons Business Crime and Compliance Conference in London. The first choice is to “choose to be open, honest, and transparent—we ask for genuine cooperation. The alternative is that a corporate can choose to play a game of smoke and mirrors.”
Some examples of smoke and mirrors, von Dadelszen said, include:
- Reporting minor wrongdoing in one jurisdiction, but omitting to mention significant wrongdoing elsewhere;
- Providing us with a bundle of key documents that are not key, and omitting those that are;
- Not providing a sensible narrative of the suspicions around what actually took place and who was involved; and
- Blocking access to documents because of commercial sensitivity.
She added: “If you want to report, please be prepared to do so properly. We do not, and never have, required the waiver of privilege, but if you want to waive privilege that will be viewed as a positive feature. We are very disinterested in privileged material that is the proper legal advice you are receiving from your solicitors. We have obviously more interest in internal investigation material and specifically interviews with witnesses, but that issue has now been clarified by the Court of Appeal. But even in light of that, do not expect engagement with us to be a civil negotiation about what a corporate can and cannot produce. We have powers to compel the production of documents and we’ll use them if we need to. We are going to ask a lot of companies who self-report to us.”
In her remarks, von Dadelszen touched upon the importance of corporate compliance. “In recent years at the SFO I have observed an increasing need for prosecutors to consider compliance issues,” she said. von Dadelszen encouraged companies to take a look at the Bribery Act guidance published by the Ministry of Justice.
“One of the things you can expect from us going forward is an increasing interest in the detail of your compliance programmes,” von Dadelszen said. “This increased focus on compliance is a good thing for people who end up sitting at a table with us. It will help you know what we view as important.”
Concerning international engagement, “we currently rely extensively on the mechanisms provided by the EU framework to assist with the investigation and prosecution of our offences,” von Dadelszen said. Where a company must engage multiple law enforcement agencies concerning suspicious conduct, “the principle to guide your decision making in this context is that you should report to the law enforcement authority where the conduct in question bites upon that agency’s jurisdiction,” she said.
“This may mean multiple reports to different law enforcement agencies,” von Dadelszen added. “It would be a mistake to leave a jurisdiction out and have them find out through collaboration with other law enforcement agencies. The SFO will certainly ask you if you have reported to other jurisdictions and what exactly you have reported. My advice is that transparency is absolutely the best policy.”
von Dadelszen concluded: “The world is getting smaller and there are fewer places to hide. My advice: Engage now or hide behind smoke and mirrors at your peril.”