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FSA has power to prosecute for money laundering offences

30 July 2010

The Financial Services Authority has the power to prosecute for money laundering offences under the Proceeds of Crime Act 2002 (POCA), the Supreme Court has ruled.

Neil Rollins was prosecuted in 2009 for money laundering and insider dealing by the FSA and appeared at the City of Westminster Magistrates’ Court.

The Court of Appeal rejected his argument that the FSA’s powers were limited to prosecutions under sections 401 and 402 of the Financial Services and Markets Act 2000.

Delivering judgment on behalf of the court in R v Rollins [2010] UKSC 39, Sir John Dyson said the insider dealing charges related to a sale of shares by Rollins, the money laundering to the transfer of the proceeds to a bank account in his father’s name.

Sir John said that if Rollins’ arguments were accepted, and the FSA discovered evidence that would support a prosecution under sections 401 and 402 as well as for other offences, it would have to refer any decision regarding the other offences to the DPP.

“This is a most inefficient and absurd way of prosecuting crime,” he said. “Parliament cannot have intended to create such an absurd state of affairs.”

He added that the fact that the FSA does not have statutory powers of investigation in relation to offences under POCA “tells one nothing about his power to prosecute those offences”.

The Supreme Court held that the FSA has the power to prosecute money-laundering offences under sections 327 and 328 of POCA.

Lords Saville, Rodger, Brown, Kerr and Clarke and Lord Judge, the Lord Chief Justice, contributed to the judgment.

A spokesman for the FSA welcomed the ruling and said the case was listed for trial at Southwark Crown Court on 15 November this year.

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Financial services & Tax Divorce