Pinsent Masons accused of 'deliberately misinterpreting' SFO data

The Serious Fraud Office (SFO) has accused Pinsent Masons of 'deliberately misinterpreting' data on the number of cases it investigates and allegations it is not properly funded.

Pinsent Masons has published statistics which show the SFO has seen a 13 per cent rise in tip offs, bringing the total number to over 2,800 in 2015. However, the international law firm noted that only 16 new investigations were opened last year.

The firm warned that, despite the increasing use of SFO Confidential - a dedicated email address designed to allow suspected cases of serious fraud or corruption to be reported - a lack of funding could mean some cases are not being fully investigated.

In January, the prosecuting authority had to request £21m in additional 'blockbuster funding', the fourth such request in as many years.

Barry Vitou, head of global corporate crime at Pinsent Masons, said: 'It's disconcerting that such a tiny fraction of tip offs are developing into full investigations. The government needs to ensure that the SFO is well resourced enough to follow up all credible leads received.'

The partner said the SFO could be forced to concentrate existing funds on a small number of large cases such as the manipulation of EURIBOR, Forex-rigging, and the international bribery allegations linked to GlaxoSmithKline.

'Investigations carried out by the SFO are both time-consuming and expensive,' said Vitou. 'Opening a new case becomes an uninviting prospect when resources are already over-stretched. The idea that available budget does not impact outcomes does not hold up to much scrutiny.

'With a whistleblower reporting system in place but not enough money, the SFO will be forced to continue to prioritise only the cases it considers most important - leaving others to fall by the wayside.

'This means that there is a risk that whistleblowers - a major source of information for the SFO - are being failed and that large cases of serious fraud or corruption are slipping through the net.'

The SFO, however, has hit back. According to a report in the Times, an SFO spokesperson said it had repeatedly told Pinsent Masons's PR firm that not all frauds fall within the SFO's remit.

'If the information provided is not for us, we pass it on to other relevant law enforcement agencies and regulators. To suggest the SFO has not been able to investigate is deliberately to misinterpret this data,' they said.

The spokesperson added that it was wrong to suggest that the SFO's budget impacts its ability to pursue cases and it would never refuse an investigation on grounds of cost.

Pinsent Masons's analysis has, however, been defended by Jonathan Pickworth, a partner and white collar crime expert at global firm White & Case.

Commenting on the furore, Pickworth said: 'Clearly the SFO cannot be expected to investigate everything. Its remit is to look into only the most serious and complex cases of fraud and corruption, and it should not be criticised for being discerning in deciding which cases to take on. There are, however, ways in which it might be able to achieve a greater throughput of cases.

'Perhaps if it were to offer more of a 'carrot' approach, (e.g. civil settlements for self-reporting) and less 'stick', it may find that more companies would willingly self-report. The SFO then wouldn't have to investigate every single whistleblower report and could instead focus its limited resources more effectively, as reformed and ethically compliant self-reporting companies would do the investigative work.'

Contract extension

The Attorney General Jeremy Wright QC MP today announced that the SFO's director, David Green CB QC, has had his contract extended by two years.

With this announcement, White & Case's Pickworth said the time had come for the SFO to take a more pragmatic approach for a more efficient throughput of cases and ensure its own survival.

Reflecting on the last four years, Pickworth observed that the SFO needs to investigate cases that appear to be of public importance, even if not all such cases should inevitably be prosecuted.

'After all, the purpose of an SFO investigation is to find out whether there has been criminal conduct and if so whether to prosecute,' he said. 'The SFO's role is harder than that of most prosecutors as it only deals with the most serious and complex cases; it doesn't get any easy wins.'

Pickworth concluded that this approach would save taxpayers' money and enable the SFO to focus its resources on the most complex cases of fraud.

The extension of Green's contract was also welcomed by Stephen Parkinson, head of criminal litigation at Kingsley Napley.

'This is a sensible decision which recognises David Green's achievement in reinvigorating the agency and restoring its centre of gravity, which is the investigation and prosecution of serious and complex fraud,' he said

'The extra time will enable Mr Green to see through the SFO's current caseload and provide stability for its staff. The decision also appears to lay to rest uncertainty about the future of the SFO, at least for the time being.'