A second UK company has cut a deal with fraud prosecutors in a landmark arrangement that involves its parent business lending the funds so it can pay a fine rather than face a long court trial, officials announced on Friday.
The second-ever deferred prosecution agreement was approved by Sir Brian Leveson, the president of the Queen’s Bench Division of the High Court. According to the Serious Fraud Office, the unnamed company will pay a fine of more than £6.5 million.
Peter Binning commented: “The case highlights the question of how far a holding company can be held responsible for paying the criminal penalties that a prosecutor wants to impose for the acts of its subsidiary.
Here the court has approved a pragmatic solution to the problem and the DPA, as finally approved by the court, has set out why an innocent holding company should pay up in these circumstances.
Why? The answer seems to lie partly in the adverse perception of even innocent receipt of the proceeds of crime, and partly in the interests of the parent in maintaining the ability to trade in the market in which XYZ operates. This is also due to the exceptional nature of this case where there was a great deal of motivation on the part of the SFO to secure an acceptable DPA despite the overall penalty and financial disgorgement being low in comparison to the scale of the offending. No costs were awarded to the SFO due to XYZ being so impecunious and no compensation was ordered.”
David Corker is quoted in The Telegraph and Law360 on the SFO’s credibility after Unaoil judgment
December 14 2021
Jessica Parker quoted in Bloomberg on NatWest pleading guilty V FCA
October 7 2021
David Corker is quoted in inCOMPLIANCE on FCA investigations
September 21 2021