Yesterday, the Serious Fraud Office ("SFO") charged four British nationals, including an IFA, (all connected with Sustainable AgroEnergy plc – a biofuel investment group) with offences of conspiracy to commit fraud by false representation and conspiracy to furnish false information, contrary to section 1 of the Criminal Law Act 1977. According to the SFO, "the value of the alleged fraud is approximately £23m and the offences are said to have taken place between April 2011 and February 2012."
More significantly though, three of the four were also charged with offences of making and accepting a financial advantage contrary to sections 1 and 2 of the Bribery Act 2010. This marks the first charges brought by the SFO under the Bribery Act 2010 and, although those on the receiving end are individuals this time around, sends out a warning to those organisations without "adequate measures" in place that the SFO may not be so afraid to flex its muscle in response to corporate wrongdoing in the near future.
Compliance with the 2010 Act is not optional. Accordingly, organisations should be alert to their exposure to liability where third parties (including employees) commit an act of bribery or corruption on its behalf or for its benefit. Such liability is strict and can arise without the knowledge of the organisation. The upshot of corporate liability is not pleasant and may amount to the imposition of an unlimited fine, director disqualification and even the prosecution of directors/senior managers (depending on the level of awareness/proximity).
Given the determination of the government to stamp out this widespread problem and with the SFO looking like it is now about to ramp up its activity, it is important that businesses of all sizes take steps to ensure they have robust anti-bribery and corruption procedures in place. Where such "adequate procedures" can be evidenced, organisations can avoid liability by relying on this defence.