In a July 1 speech to the UK Aerospace and Defence Industry Seminar, Ben Morgan of the Serious Fraud Office (SFO) discussed his recommendations for how companies seeking Deferred Prosecution Agreements (DPAs) should interact with the SFO. His resounding message was cooperation on the part of the company, not just “the impression of cooperation” but real, honest cooperative action.
As we reported in February of this year, DPAs allow companies to settle allegations of criminal economic activity without being prosecuted and without any formal admission of guilt. The use of DPAs is at the discretion of prosecutors and is only available after a formal invitation to enter into negotiations has been extended to the company. Subject to the corporate agreeing to and complying with a number of terms and conditions agreed with the prosecutor, the prosecutor will suspend the prosecution. If the company does not honour these terms and conditions, the prosecutor may resume.
Although Mr. Morgan acknowledged that the decision to finalise a DPA ultimately rests with a judge, he declared “I certainly won’t be inviting any corporate into the process who I do not honestly believe is being fully frank with us”.
In an effort to clarify what the SFO requires from corporates seeking a DPA, Mr. Morgan detailed the four behaviours crucial to convincing the SFO of their “genuine cooperation”, one of the SFO’s stipulations before they will begin DPA negotiations:
1) Tell the SFO something they don’t know and tell them promptly. Gather enough knowledge to necessitate speaking to the SFO, but don’t wait long enough for the SFO to find out for themselves.
2) Provide the SFO with the best possible information about what happened, including actual first witness accounts.
3) Communicate with the SFO respectfully and simply. Avoid behaviours that undermine the investigating officer and would destroy any trust between the company and the SFO.
4) Take a number of other cooperative steps expected by the SFO. These include information sharing and engagement with the SFO on issues such as the scope of the investigation.
In response to questions over the likelihood of the SFO finding out about a potential criminal incident, Mr. Morgan described the SFO’s expanding intelligence capability and ongoing investment into investigative tools, albeit he didn’t specify what these tools were.
Whilst claiming not to be persuading companies to seek DPA’s, Mr. Morgan was seeking to enlighten companies on the potential for cooperation with the SFO as an alternative to defending a prosecution.
Although Mr. Morgan admitted that DPAs are not always an option and that adherence to his recommendations would not guarantee a finalised DPA, his speech made it clear that ignoring this advice could quickly rule out a DPA as a potential resolution.