UK: Supreme Court Confirms FSA’s Power To Prosecute Money Laundering Offences

Last Updated: 3 August 2010
Article by Omar Qureshi, Elizabeth Alpass and Alison McHaffie

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In October last year we reported on the Court of Appeal decision in R v Rollins, which concerned a prosecution by the FSA for insider dealing and money laundering (see our LawNow). In that case, the Court of Appeal confirmed the FSA's power to prosecute offences beyond those expressly set out in the Financial Services & Markets Act 2000 ( "FSMA"), including money-laundering offences under the Proceeds of Crime Act 2002 ("POCA"). That decision was subsequently appealed and on 28 July 2010, the Supreme Court unanimously dismissed the appeal.


The appellant, Mr Rollins, argued that the FSA's powers to prosecute criminal offences were limited to those referred to in sections 401 and 402 FSMA (which did not include offences under POCA). Accordingly, the question was whether the effect of sections 401 and 402 FSMA was to confine the FSA's prosecution powers to the offences listed within those sections.

The Supreme Court's judgment

The Supreme Court noted that any person has the right generally to bring a private prosecution, subject to any statutory restrictions. This right extends to a corporate, so long as it is permitted to do so by its corporate instruments, such as its memorandum and articles of association. Therefore, as a corporate body, the FSA enjoys the right to bring private prosecutions, subject to any statutory restrictions and provided it was permitted to do so under its memorandum and articles. The FSA's objects include carrying out any functions conferred on it by statute. FSMA sets out the FSA's functions and objectives, which includes acting in a way that it considers most appropriate to meet its regulatory objectives, including the reduction of financial crime. In this regard, it has powers of prosecution.

POCA did not contain any statutory restrictions on who may bring a prosecution for an offence it created. Therefore, absent sections 401 and 402 FSMA, the FSA would have power to prosecute money laundering offences under POCA, like anyone else.

The Supreme Court considered those sections of FSMA and agreed with the Court of Appeal that the purpose of section 401(2) was not to limit the offences that FSA was permitted to prosecute, but to limit the power to prosecute offences under FSMA to the FSA (and those other persons listed).

The Court roundly rejected the appellant's argument that FSMA exhaustively defined the offences that the FSA could prosecute. The Court noted that as one of the FSA's functions was to reduce financial crime, "Parliament would not have intended to deprive the FSA of the power to prosecute for offences of financial crime (of which sections 327 and 328 of POCA are examples)". If the FSA was limited to prosecuting solely the offences listed in section 402, this would be an "inefficient and unsatisfactory way of prosecuting crime"; there was no need to infer that Parliament intended to limit the FSA's power in this way.

The fact that the Explanatory Notes to FSMA may have assumed that sections 401 and 402 provided an exhaustive code was irrelevant. The Explanatory Notes were drafted by the Treasury and could not be relied on to determine Parliament's intention. Further, the fact that FSMA does not confer on FSA powers of investigation regarding offences under POCA does not assist in interpreting its prosecution powers - "the right of private prosecution does not depend on the enjoyment of corresponding powers of investigation".


While this case confirms that the FSA has broad powers to prosecute financial crime, this does not mean that the FSA will now assume a role of general fraud prosecutor. It is only likely to prosecute other offences where an express offence under FSMA is the primary offence.

The Coalition Government has signalled its intention to dismantle FSA and bring together all those authorities who investigate and prosecute economic crime into a new Economic Crime Agency (the "ECA"). It remains to be seen whether and how the Government's proposals will be followed through, but if they are, the issues considered in R v Rollins may become mute.

For a link to the Supreme Court ruling in R v Rollins [2010] UKSC 39, please click here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 30/07/2010.

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