Included in this issue: DoJ seconds lawyer to the UK's FCA and SFO; SFO decides not to prosecute Soma Oil & Gas; HMRC offer online anti-money laundering supervision and more...
DoJ seconds lawyer to the UK's FCA and SFO
In order to further cooperation between law enforcement in the US and UK, the Criminal Division of the US Department of Justice is planning to second a trainee to spend a year at the FCA followed by a year at the SFO. This is to promote a better understanding of the two countries' legal systems. The secondee will spend a further year at the Fraud Section of the Criminal Division in Washington to relay back business practices and legal updates learnt from the secondment.
Legal Advice Privilege
In the recent case of The RBS Rights Issue Litigation the High Court followed the narrow availability of Legal Advice Privilege set out in the controversial Three Rivers (No. 5).
In The RBS Rights Issue Litigation, RBS sought to protect notes of interviews of RBS employees created during the course of internal investigations by claiming that they were covered by Legal Advice Privilege. The bank argued that so long as a person was 'authorised' to communicate with lawyers of the firm, the communication would be privileged, whether the communication was to provide the firm with instructions or with information that will allow the firm to provide advice to the bank.
The Court disagreed with this position, applying the narrow definition of "client" provided by the Three Rivers case and determining that privilege could not be claimed over these interview notes. The Court stated that a person providing information to a legal advisor will generally be an employee, not a client. The Court additionally rejected the bank's secondary argument that interview notes comprised lawyers' working papers (which are covered by legal privilege).
This is an important ruling for large companies such as banks who wish to protect evidence which is gathered where litigation is not in reasonable contemplation. It is envisaged that the case will be appealed.
Addleshaw Goddard, 16 December 2016
Bribery and Corruption
SFO decides not to prosecute Soma Oil & Gas
The SFO announced on Wednesday that they were closing their investigation into allegations of corruption by officers of Soma Oil & Gas. After reviewing the evidence the SFO concluded there was not enough evidence to provide a realistic prospect of conviction.
Ex-US Congressman sentenced to 10 years in prison
Former Representative Congressman, Chaka Fattah, has been sentenced to ten years in prison for offences including racketeering, fraud and money laundering. This will make him the second longest serving convicted criminal to serve in congress.
The case centred on a $1 million 'loan' which Fattah borrowed to fund his mayoral campaign. Much of this loan was repaid using federal and charitable funds.
HMRC offer online anti-money laundering supervision
HMRC have announced plans to introduce a new online system for registering and renewing anti-money laundering supervision in 2017. The new system is designed to reduce errors and 'rejected 'applications and to generally improve efficiency. This will affect businesses such as accountants and tax advisors, independent legal professionals, estate agency businesses and currency exchanges who are not already supervised by other designated supervisory authorities.
Guinean ex-minister of mines charged for $8.5 million money laundering offence
Former Minister of Mines and Geology for the Republic of Guinea, Mahmoud Thiam, was charged on Tuesday for laundering bribe proceeds through New York. Mr Thiam is accused of having laundered approximately $8.5 million in proceeds from bribes received from two Chinese companies which are part of the same conglomerate. The bribes were allegedly, given in exchange for Mr Thiam helping the conglomerate and its affiliates to secure a near monopoly of Guinea's mining sector and lucrative investment rights in various other sectors of the Guinean economy. Mr Thiam, who is a US citizen based in Manhattan, will now face justice in front of a federal court.
Department of Justice, 13 December 2016
SEC charge two traders for $26 million stock manipulation
The SEC, on Monday, charged two traders from New Jersey for their roles in allegedly manipulating stocks on both the New York Stock Exchange and NASDAQ. It is claimed that Joseph Taub and Elazar Shmalo would use two accounts- one to buy a position in the stock and the other to artificially inflate or deflate stock prices. It is alleged that this resulted in a combined profit of over $26 million. In addition to the SEC's investigation, the US Attorney's Office for New Jersey have launched a parallel action to bring criminal charges against the pair.
29 Arrested after corruption probe into Hong Kong Financial Institutions
Authorities in Hong Kong have arrested 29 current and former employees of five financial institutions in Hong Kong. The staff are accused of unlawfully obtaining and using customer information to target personal loans.
Twelve arrested in NCA cyber sting
The National Crime Agency (NCA) has arrested twelve individuals in respect of an operation targeting those that use a type of software to disable web servers and websites by "flooding them with massive amounts of data". This software is called a Distributed Denial of Services programme (DDoS) and can cost as little at £4.
The DDoS has allowed less sophisticated users to conduct cyber attacks. The cost to businesses is estimated to run into millions and the frequency of these attacks is on the rise.
Health and Safety
Rail construction companies prosecuted for employee deaths on Crossrail project
BAM Nuttall Limited, Ferrovial Agroman (UK) Ltd and Keir Infrastructure and Overseas Ltd are to be prosecuted in relation to three incidents which occurred during the Crossrail railway tunnel construction.
All three companies are charged with four offences each. Two offences relate to the death of Rene Tka'cik in 2014 and the two other charges relate to injuries sustained by two other workers in separate incidents in 2015.
All will appear at Westminster Magistrates Court in January 2017.
Farmer jailed for killing child with tractor whilst intoxicated
A self-employed farm worker has been imprisoned after running over and killing a young boy with his tractor, while 2.5 times over the legal drinking limit. The boy was visiting Swithens Farm. Some areas of the farm were open to the public at the time the incident occurred.
Following the incident, Gary Green, the driver of the tractor, was breathalysed by the police and was found to be 2.5 times over the alcohol limit for driving on a road.
Gary Green, Bradburn Road, Wakefield, pleaded guilty to breaching Section 3(2) of the Health and Safety at Work etc. Act (1974) and was sentenced to 16 months and 2 weeks in prison
Iran announces plans for nuclear powered ships in defiance to US Sanctions
President Hassan Rouhani of Iran has released a statement stating that he has instructed his officials to begin "planning the design and production of nuclear fuel and reactors for maritime transport". This development comes after Congress recently approved a law extending sanctions on Iran despite a recent international agreement for world powers to lift sanctions on the country in exchange for restrictions on its nuclear programme.
EU votes to extend sanctions against Russia
Leaders from 28 European member states have voted last this week to extend economic sanctions against Russia for another six months. The sanctions, which focus on Russia's energy, finance and defence sectors, were imposed in response to Russia's role in the conflict in eastern Ukraine. EU leaders, who met on Thursday, felt that Russia had not done enough to help maintain peace in Ukraine.
Partner, Head of Global Investigations/Inquiries