Category Archives: UK Financial Conduct Authority (FCA)

The Second Circuit Clarifies How U.S. Constitutional Principles Apply in Multijurisdictional Investigations

By Frederick T. Davis

In United States v. Allen, the Second Circuit held that self-incriminating statements compelled by a foreign sovereign cannot be used, directly or indirectly, in a U.S. prosecution. The opinion thoughtfully analyzes how U.S. constitutional principles apply in cross-border investigations and may have some impact on how such investigations are conducted in the future.

During the well-known investigations of alleged manipulation of the London Interbank Offered Rate (“LIBOR”), U.K. citizens and low-level bank employees Anthony Allen and Anthony Conti were suspected of artificially adjusting exchange rate information to affect LIBOR and benefit their confederates.  The U.K. Financial Conduct Authority (“FCA”) compelled Allen and Conti’s testimony under the Financial Services and Markets Act 2000 (“FSMA”). The FSMA provides that the FCA could not use Allen and Conti’s statements against them but could use the “fruits” of any investigation developed on the basis of their statements. The FCA also compelled testimony from Paul Robson, one of Allen and Conti’s co-workers, who provided generally exculpatory information regarding himself, Allen and Conti.  Later, the FCA commenced an enforcement action against Robson and provided him with transcripts of Allen’s and Conti’s statements, which Robson carefully reviewed.  The FCA ultimately decided not to prosecute Allen, Conti, or Robson. Continue reading

UK Financial Conduct Authority Outlines Extension of Senior Managers and Certification Regime to All Regulated Firms

by Karolos Seeger, Andrew Lee, and Simon Witney

On 26 July 2017, the UK Financial Conduct Authority (“FCA”) issued its first consultation paper on extending the Senior Managers and Certification Regime (“SMCR”) to almost all of the approximately 50,000 firms regulated by the FCA.[1] The SMCR represents an important pillar of the FCA’s continuing efforts to promote individual responsibility and improve senior management accountability across the entire UK financial services industry. It will replace the current Approved Persons Regime.

The FCA has requested responses to the consultation paper by 3 November 2017, and there will be further consultation papers on particular aspects of the SMCR. It is anticipated that final rules will be published in the summer of 2018, and firms should expect to have to implement these by the end of next year. The SMCR has three main components: the Senior Managers Regime, the Certification Regime and the Conduct Rules. The key features of each are summarized below. Continue reading

Practical Issues in Financial Services and Securities Law Enforcement: A UK Perspective

by Mark Steward

Keynote Speech at New York University School of Law Program on Corporate Compliance and Enforcement – 31 March 2017

Thank you very much for inviting me here today. It is a great privilege to be here, listening to and participating in today’s discussions. I congratulate the New York University Law School for convening today’s program.

Opening

Conduct issues give rise to competing tensions within firms. Everyone can feel hard done by, whether justifiably or not. Firms complain about having to shoulder responsibility for errant staff; staff complain about being scapegoated; regulators and other authorities are blamed for not holding to account those who are supposedly ‘really responsible’ with the public too often feeling the regulatory outcomes do not fully attribute blame.I want to speak to you about today’s theme, the expanding scope of individual liability for corporate misconduct, from a UK perspective with reference to recent developments in the UK, especially the Senior Manager’s Regime which commenced operation just over a year ago. Continue reading

Firsts for UK SFO with In Principle False Accounting DPA, and for FCA with Market Abuse Compensation, Against Tesco

by Stuart Alford QC, Daniel Smith and Yasmina Borhani

Following a two-year investigation, Tesco PLC has announced that its subsidiary Tesco Stores Limited (Tesco Ltd) had agreed in principle the terms of a Deferred Prosecution Agreement (DPA) with the UK Serious Fraud Office (SFO), subject to final judicial approval at a hearing scheduled for 10 April 2017 before Sir Brian Leveson PC.  The DPA would result in Tesco Ltd paying a $129 million fine to the SFO, together with the SFO’s costs.  It is also likely to include an admission of criminal liability and an agreed statement of facts, albeit publication of details may be withheld to avoid prejudicing the ongoing prosecution of former Tesco executives. Continue reading