UK: Sweeping New Prosecution Powers For The Financial Services Authority

Last Updated: 3 February 2010
Article by Robert Brown

This article was originally published in The Times in November 2009

Implications of recent case brought by FSA

A jury at Southwark Crown Court recently convicted Neel and Matthew Uberoi, a dentist and his son, of offences of insider dealing. The case was brought by the Financial Services Authority (FSA). The case is one of a number that raise important questions about how many prosecution agencies we should have and to what extent the powers of such prosecutors should be limited or regulated.

Most people know that the Crown Prosecution Service (CPS) is responsible for prosecuting all criminal cases in England and Wales. But that is not the whole picture. Other statutory agencies have the power to prosecute and private individuals can also bring private prosecutions in a criminal court. Until the mid-1980s the police were responsible for both the initial investigation and the subsequent prosecution of a case at court. Concerns about their lack of independence and objectivity were factors that led to the creation of the CPS in 1985.

The statutory body is staffed by civil servants - qualified lawyers - who make decisions on whether prosecutions should be brought as a result of a police investigation. The significance of this hierarchy is the separation of power and responsibility between the two. Equally important for public confidence is the Code for Crown Prosecutors, which requires that a prosecution will start only if specified objective criteria are met. These are detailed and designed to ensure that a case is not brought unless there is sufficient evidence and that it is in the public interest that the suspect be prosecuted for a criminal offence.

The other statutory bodies that have the powers to prosecute, such as the FSA, the Department for Work and Pensions and the Health and Safety Executive, would normally apply the CPS code before deciding to act. But recent developments suggest that they may be able to prosecute for offences far beyond those that obviously fall within their area of special interest.

Court of Appeal allows FSA to prosecute money laundering case

This proposition has arisen from the recent decision of the Court of Appeal that ruled on two cases (for the appeal the cases were conjoined as Rollins and McInerney) brought by the FSA. One case concerned an allegation of insider dealing and the other was a prosecution for involvement in a boiler room fraud (where investors are pressurised into buying worthless shares). Parliament had given the FSA specific authority to prosecute these types of offence because they clearly fall within the remit of the financial regulator. But in these cases the FSA went farther and included charges of money laundering even though Parliament did not give it that power.

In what is likely to prove a ground-breaking judgment, the Court of Appeal ruled that it made good sense for the FSA to be able to prosecute for money laundering because there would otherwise have to be a separate trial brought by a different agency for these offences. It also made sense because money-laundering offences can be seen as similar in nature to other white-collar crimes. The Court of Appeal said that in these cases the FSA could prosecute in its capacity as a private individual. The surprise in this was not just that the FSA suddenly acquired (via the common law) powers to prosecute that had not been granted to it by Parliament, but the very concept that a regulatory body with enormous resources could ever be characterised as a "private individual". For the Court of Appeal the pragmatic ends seem to have justified the means.

The future of prosecution agencies

This decision was made against the backdrop of an increasingly hot debate concerning the future of a number of prosecution agencies. It has already been decided by Government that the Revenue and Customs Prosecutions Office will be merged with the CPS. Some commentators have campaigned for the Serious Fraud Office to be abolished or at least merged with one or more of the existing agencies. After last year's economic crash the Tories indicated their intention to abolish the FSA if elected.

Failure to limit prosecution powers is dangerous

What is most curious about the appeal court decision is that it failed to define the limitations of the power of the FSA to prosecute for potentially any offence in its capacity as a private individual. Just as we have recently seen a surge in the number of FSA prosecutions we may now see it and other statutory bodies flexing their muscles by bringing private prosecutions in cases in which until recently no one believed they had any power.

Whatever happens, private prosecutors are not bound by any code of practice. Indeed, one reason for the creation of the CPS was to enable the Crown to take over and halt unmeritorious private prosecutions. The Court of Appeal decision now means that these bodies are able to instigate and prosecute a wider range of offences than those allowed by Parliament, but without the safeguards designed by those who designed the CPS 25 years ago.

Corker Binning is a law firm specialising in fraud, regulatory litigation and general criminal work of all types. For further information go to http://www.corkerbinning.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.