Welcome to the August 2017 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 update.
Welcome to the July 2017 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 update.
Given the distractions of the summer holiday season and the aftermath of the Brexit referendum, it would be understandable if other developments slipped off the radar. However, there is one particular deadline for regulated firms that demands urgent attention. Under the whistleblowing rules published by the FCA and PRA back in October 2015, relevant firms must implement effective internal whistleblowing arrangements by 7 September 2016. Relevant firms include:
- UK deposit-takers with assets of £250m or more (ie, banks, building societies and credit unions);
- PRA-designated investment firms; and
- Insurance and reinsurance firms subject to Solvency II, and the Society of Lloyd's and managing agents.
The arrangements must go further than the statutory whistleblowing protection available to workers and therefore even firms with pre-existing policies are likely to need to update them.
France's finance minister Michel Sapin presented a proposal for a new law on transparency, anti-corruption measures and the modernisation of the economy to the Council of Ministers on 30 March 2016.
The FCA and the PRA have both published policy statements on their new rules on whistleblowing as part of their series of policy changes focused on strengthening individual accountability within the banking and insurance sectors:
- FCA policy statement (PS15/24) entitled "Whistleblowing in deposit-takers, PRA-designated investment firms and insurers"; and
- PRA policy statement (PS24/15), also entitled "Whistleblowing in deposit-takers, PRA-designated investment firms and insurers" (Appendix 1, Appendix 2, Appendix 3) and accompanied by a supervisory statement (SS39/15).
These rules supplement the statutory protections all employees and workers have pursuant to the Public Interest Disclosure Act 1998 (the PIDA).
The US Court of Appeals for the Second Circuit in Liu Meng-Lin v. Siemens AG, 13-4385-cv (2d Cir. N.Y. Aug. 14, 2014) upheld a lower-court’s decision to grant Defendant Siemens’ motion to dismiss a claim alleging wrongful termination brought by Taiwanese resident, Liu Meng-Lin, a former employee of Siemens China. The Second Circuit held that the Dodd-Frank whistleblower anti-retaliation provision relied upon by Mr Liu did not apply extraterritorially, to a non-US citizen employed abroad by a foreign company, where all events allegedly giving rise to the liability occurred outside the United States. To read the briefing prepared by our team in New York, click here.
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have proposed not to introduce financial incentives for whistleblowers, concluding that introducing financial incentives would be unlikely to improve the number or quality of disclosures received from whistleblowers (see here). Continue reading
On Wednesday, the Government published its response to its most recent call for evidence on the UK whistleblowing framework. Despite acknowledging that the consultation was prompted by an acknowledgement that “there were weaknesses in the framework, so that the legislation has not always achieved its intended outcome”, the Government is not planning any significant legislative amendments to the current framework, and has certainly fallen short of the expectations set by the Whistleblowing Commission. Read more from our Employment team.
Herbert Smith Freehills hosted a flagship Corporate Crime and Investigations conference in London last week, featuring high profile speakers and panellists from a wide range of industries. Corporate crime, anti-bribery and corruption, whistle-blowing and compliance developments were explored during sessions stimulating lively debate.
Keynote speakers at the full day conference on 20 May 2014 included Alison Saunders, Director of Public Prosecutions, Adrian Leppard, Commissioner of the City of London Police, and David Green QC, Director of the Serious Fraud Office. Continue reading