Lisa Osofsky appointed head of the Serious Fraud Office
After a protracted process, Lisa Osofsky finally took up the reins as the new Director of the Serious Fraud Office (SFO) on 3 September 2018 for an initial five-year term, during which she has pledged to make Britain an "inhospitable place" for white-collar criminals.
Despite her wealth of experience, including stints at the US Department of Justice, the FBI and, most recently, as EMEA Regional Leader and Head of Investigations at Exiger, Ms Osofsky's appointment has attracted media attention.
Among other things, her previous enthusiasm for Theresa May's ambition to merge the SFO into the National Crime Agency faced widespread opposition in the legal sector (she has since said that she no longer supports this proposal).
A new tone from the top?
The new Director has expressed a desire to concentrate on fostering links with overseas agencies and it is this, coupled with her background at the FBI, that has excited the most speculation about impending change for the SFO.
Closer co-ordination between enforcement agencies in the United Kingdom and overseas counterparts, specifically the United States, has long been viewed as a necessary step towards identifying and prosecuting the most successful international economic criminals.
Another expected change is an increased focus on Deferred Prosecution Agreements (DPAs).
This is perhaps not surprising given the new Director's background working in the US (which has been negotiating DPAs since the 1990s), the relative attractiveness of DPAs with businesses and the growing number of other jurisdictions where similar settlement options are available – see International Developments below. However, companies who wish to benefit from a DPA will be increasingly expected to offer a "Rolls-Royce" standard of co-operation in any investigations.
The former SFO Director, Sir David Green QC, has since been followed out of the door by his longserving General Counsel Alun Milford (reportedly many people's pick for the top job after Green's departure).
Another high-profile recent departure was John Gibson, the case controller with responsibility for the long-running investigation into Eurasian Natural Resources Corporation (ENRC).
With the creation of new roles such as the Head of Intelligence and the Head of Corporate Services, in theory the senior management team, specifically
the Chief Investigator and incoming GC, should be able to devote their full attention to their core roles. In making these changes, the new Director has explained that the SFO is seeking to expand its capacity "for strategic, proactive and intelligencedriven case development and case challenge".
Ms Osofsky has taken an immediate opportunity to make her mark. Her decision not to pursue an appeal to the Supreme Court on the scope of legal professional privilege in documents relating to the ENRC case has been widely seen as a sign of determination not to be hemmed in by past priorities. However, Ms Osofsky warned that the SFO will continue to assess the merits of privilege claims in the future. The ENRC saga is far from over, though, with a judge-led investigation now under way into allegations (which the SFO denies) of serious misconduct by the SFO in its dealings with ENRC's former lawyer.
Reflections of David Green's tenure at the SFO
When David Green QC entered office as the Director of the SFO in 2012, he faced quite a challenge. His predecessor's time was marked by a tendency towards civil settlements rather than criminal prosecutions and had been marred by reports of a number of scandals, including in relation to three severance packages handed out without Treasury approval.
Dial forward over 6 years and Green has now left the SFO and is embedded in private practice with a major city law firm. The question is, what has he left behind?
In many ways, Green's greatest achievement was to give the SFO back its "mojo" (his words, not ours). By that we mean he returned focus to taking on the most difficult cases (think LIBOR, Euribor, Barclays etc) and on being an investigator and prosecutor first and foremost. That, of course, has to be balanced against the introduction, on Green's watch, of the most notable feature of his tenure: the introduction for the first time, in this jurisdiction, of the Deferred Prosecution Agreement (DPA).
The ability for the SFO to deploy a DPA is gamechanging, enabling it to avoid an expensive criminal trial, obtain a guaranteed "win" and, importantly, recover some serious money from the party being investigated. Of particular note in this regard is the £497 million paid out by Rolls Royce in January 2017, swiftly followed by a further £129 million from Tesco three months later.
Those kind of returns can go a long way to ensuring the long-term survival of the SFO. However, for some, DPAs jeopardise the renewed focus on "prosecution", and the SFO that Green leaves behind will have to monitor that balance carefully.
While there were some notable successes during his reign (for example, the convictions of former UBS and Citigroup trader Tom Hayes (Yen LIBOR) and ex-Deutsche Bank trader Christian Bittar (Euribor)), there were also some painful moments, such as judicial criticism of the SFO during the judicial review of its investigation into the Tchenguiz brothers and subsequent multi-million pound settlements (another issue leftover from his predecessor); the collapse of the trial into Victor Dahdaleh (during which the SFO was heavily criticised after key SFO witnesses refused to give evidence); and the acquittal in January 2016 of six brokers accused of helping Tom Hayes. Indeed, even the conviction on Tom Hayes remains subject to constant discussion.
In addition, the SFO continues to struggle to retain its top people and, indeed, to safeguard its very independence.
As to the latter, Green appears to have headed off the threat of the SFO being subsumed into the National Crime Agency and his successor, Ms Osofsky, has offered further assurances that the SFO will remain independent.
With an additional, and much needed, increase in budget also secured, the SFO appears to be back on course, for now, and Green can feel proud of his achievements. Only time will tell though whether, now that it is re-established as a credible prosecutor, it really does have its mojo back.
Latest Corruption Perceptions Index from Transparency International
The UK remains close to the top of the latest table of the least corrupt territories in the latest 2017 Corruption Perceptions Index, sitting alongside Canada, Luxembourg and the Netherlands.
However, as noted by the independent watchdog Transparency International, there is no room for complacency and no territory gets close to a perfect score - the UK's score is 82/100 which moves it up to eighth position from tenth position in 2016.
Two thirds of the countries included in the index score below 50, and indeed, the global average is 43/100, suggesting widespread and endemic public sector corruption. Transparency International notes that activists and media are vital to combatting corruption, and as such has outlined their 'top five
recommendations' to curb corruption, which encourages governments and businesses to do more to encourage independent media, promote laws that focus on access to information and disclose relevant public interest information in open data formats.
Duncan Hames, Director of Policy at Transparency International UK, said: