Ukraine – EU imposes asset freeze on members of former government and issues a statement in relation to Russia; US introduces Executive Order permitting the blocking of assets
The EU and US have both recently taken steps to respond to recent events in Ukraine. On 5 March 2014, the EU introduced an asset freeze applying to former President Yanukovych and other former government officials and persons associated with the former government. The UK has introduced domestic legislation criminalising breaches of this asset freeze. The EU also held an emergency Heads of State meeting on 6 March. The conclusions from that meeting indicate that there is a possibility of EU sanctions being imposed on Russia in the absence of negotiations between Russia and Ukraine which produce results within a limited timeframe. Also on 6 March the US introduced an Executive Order which would permit the imposition of an asset freeze and visa bans although no companies or individuals have yet been designated. Continue reading
The Supreme Court has ruled that there is an implied contractual right to a fair disciplinary process, a serious breach of which could enable an employee to obtain an injunction preventing the employer from completing that process without starting afresh. For a more detailed briefing from our Employment notes blog, click here.
Last November’s announcement that Omnibus II negotiations had, at last, come to an end means that insurers and reinsurers must now focus on what they need to do before 1 January 2016 to prepare for Solvency II. Relatively little of the new regime has been finalised to date. Because of this, firms will have to absorb vast amounts of material that EU and UK authorities are expected to generate over the next two years. Continue reading
The Court of Appeal has handed down an important judgment holding that complainants who had accepted a Financial Ombudsman Service (“FOS”) determination were barred from bringing court proceedings in relation to the same cause of action under the legal principle of res judicata. In doing so, the Court of Appeal overruled a High Court decision that complainants to the FOS would be able to accept a determination awarding them the statutory maximum award (now £150,000) and then subsequently claim for damages above that amount through the courts.
The Sentencing Council published its definitive Guideline for sentencing corporate offenders convicted of fraud, bribery and money laundering offences on 31 January 2013 as part of a package to support the introduction of Deferred Prosecution Agreements (“DPAs”). DPAs are an alternative to criminal prosecution, and are intended to address the commission of “economic crimes” by commercial organisations. As we have previously reported, DPAs are to become available to corporate offenders on 24 February 2014. Under a DPA, a company will agree to certain conditions, which may include a financial penalty, reparation to victims, repayment of profits and measures to prevent future offending, as well as an agreed statement of facts setting out its wrongdoing. The Guideline is intended to assist as a point of reference when financial penalty levels within DPAs are being considered and negotiated, but will not actually come into force for convicted offenders until 1 October 2014, at the same time as the guideline for individuals convicted of an offence of fraud, bribery or money laundering.
In this briefing, we summarise the Guideline, outline some of the key issues raised in the Consultation responses, and look forward to possible future changes in corporate criminal liability.
The regulator continues to be successful in clamping down against the operation and promotion of unauthorised collective investment schemes (CIS). The High Court has laid down judgment in the FCA’s legal action against Capital Alternatives: the High Court agreed with the FCA and found that the investment schemes at the centre of the legal action constituted collective investment schemes. When structuring investment schemes, it is important to consider the definition of CIS within the Financial Services and Markets Act 2000 (FSMA) and to ensure that CIS operators are authorised by the FCA. Those who have structured schemes which push at the boundaries of FSMA should take note of a statement made by Tracey McDermott, the FCA’s director of enforcement and financial crime, in a press release published by the FCA yesterday: “This ruling shows that even if operators have deliberately tried to structure their scheme to avoid regulation, the court will still look at whether those operating the scheme should in fact be regulated for consumer protection”. Continue reading
Welcome to the February 2014 edition of our corporate crime update – our round-up of developments in relation to corruption, money laundering, fraud, sanctions and related matters. Our update now covers a number of jurisdictions. For the full update on each jurisdiction, please click on the name of the jurisdiction below. Below we provide a brief overview of what is covered in each jurisdiction’s update. Continue reading
The FCA has set an uncompromising compliance standard for what it sees as unacceptable payments from product providers to advisors in the retail investments sector; and laid down a marker for similar payments in the mortgages, protection and other ICOBS sectors. Firms affected must review their distribution/services agreements and other payment arrangements by 16 April 2014. Continue reading
Whilst much has been said about some of the changes which have been proposed in the ongoing reform of the regulatory regime applicable to the UK financial services industry, the full ramifications of some of the new provisions have received less attention than they deserve. The (presumably) unintended consequences of two of the proposals – the FCA’s new power to publish information about enforcement action at an earlier stage and the reversed burden of proof for “Senior Managers” – may well include shifting the emphasis of firms away from typically settling regulatory enforcement actions and in favour of taking a more adversarial approach to challenging the regulator’s conclusions. Continue reading
The Financial Conduct Authority (FCA) has today published details of two warning notices given on 28 November 2013 to bankers alleged to be knowingly concerned in failings in relation to an interest rate benchmark, in respect of whom the FCA is taking enforcement action. These statements are the first to be published by the FCA under the powers conferred by the Financial Services Act 2012, which allow the regulator to make public details about warning notices against firms and individuals before enforcement action is complete. Continue reading