Senior corporate executives could be prosecuted for offences including fraud and money laundering carried out by staff under an expansion of laws targeting so-called white-collar crime.
Attorney General Jeremy Wright said the Government is to consult on plans to extend “failure to prevent” offences, currently only covering bribery and tax evasion, to a wider range of economic crimes committed by employees, also including false accounting.
Speaking to the Cambridge Symposium on Economic Crime last month, Wright said:
“When considering the question: where does the buck stop and who is responsible for economic crime? It is clear that the answer is to be found at every level, from the boardroom down. Both corporations and individuals are responsible.”
Current law makes it very difficult to hold corporate boards to account for corporate misconduct by employees; although there now appears to be a turn in the tide. Former LIBOR traders Jay Merchant, Jonathan Matthews and Alex Pabon were sentenced earlier this year to terms of between 33 months and six and a half years for their role in manipulation of LIBOR.
The sentencing of these LIBOR traders fell far shorter than the original 14 year jail term handed out in August 2015 to Tom Hayes, a former UBS LIBOR trader who was also convicted of LIBOR manipulation in the world’s first LIBOR-rigging trial.
What can be done now?
The news of the consultation by the Government will be welcomed by action groups who have campaigned for more responsibility to be placed on the executive of companies.
The prosecution of the LIBOR riggers took substantial time to action. The Banks and financial institutions have been slow to investigate and indeed safeguard their customers from losses caused by activities such as LIBOR rigging and there now must be a change in regulation and accountability.