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SFO to companies with compliance problems: This is how you deal with us

Ben Morgan, the joint head of the bribery and corruption unit at the UK Serious Fraud Office, spoke Thursday morning to the Annual Anti Bribery and Corruption Forum in London.

He talked directly to companies that might have paid overseas bribes — particularly those that want to resolve their offenses through deferred prosecution agreements.

His advice: Come to us sooner rather than later, and cooperate.

Then he described the cooperation the SFO expects from companies.

Here’s what he said:

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Your first decision is do you tell us, or do you wait for us to come to you? Let me make one thing very clear: if we come to you, you can assume we have one thing on our mind, and that is looking for evidence to establish whether we should prosecute.

I was speaking with someone from the [defense bar] recently who said, “Yes, but surely if the company has done everything else you might want — compensated those who deserve it, fired everyone involved, checked other business lines to ensure the same problem doesn’t exist there, enhanced their compliance program, etc., then if the only thing they haven’t done is come and tell you, surely they are still in line for leniency — it is not too late to get a DPA rather than a trial, for example.”

Now I don’t want to deal in absolutes here, and I am cautious of generalizing, but actually I think my default reaction to that would be no, sorry, we came to you; you should have come to us if you wanted options. My own view is that a judge would find it hard to look at that situation and conclude that a DPA rather than a prosecution was in the interests of justice. Or put the other way around, if a company comes to us and alerts us to conduct about which we otherwise didn’t know, it is hard to see how it would be in the public interest to prosecute as opposed to seek to resolve the matter through a DPA. Each case will turn on its facts, but if you want a DPA coming to us before we come to you is a very good start.

So let’s say you’ve decided to try to control your risk, and come and speak to us. The next question is “when?” At what point in the cycle of your analysis of what has happened do you report?

Again, it is impossible to generalise, but the short answer is probably “a lot sooner than you think.”

I am told there has been quite a lot of commentary on this in the legal blogs recently — people saying “the SFO is telling you not to investigate, just put yourself in their hands, and you should reject that outright.” This is wrong, so let me explain, again, what we expect.

We expect early engagement. We don’t want to hear from you every five minutes, and we accept you need enough time and space to have an initial look at an allegation that comes to your attention. But nor do we want the first time we hear from you to be at the end of a major internal investigation, months if not years after the conduct in question has surfaced, and in particular after multiple witnesses have been interviewed and re-interviewed extensively. There is a balance between those two extremes that you will have to judge for yourselves, but the nearer the beginning of your own investigative work you speak to us, the happier we will be.

The next question once you have decided to speak to us, and chosen your moment to do so, is what happens next. This is where the issue of cooperation really kicks in.

We want you to engage with us on how investigation of what has happened takes place, and to respond to our interests in doing so. We are already building a track record with some law firms of how to do this together, in a constructive way that enables us to investigate fairly in respect of all corporate and individual suspects who may be involved, but also that where appropriate is sympathetic to the commercial context of your business, and your need to progress your understanding of what has happened and act on it for reasons unconnected to us. I hope those who are engaged with us at the moment in this way would agree that while we put the integrity of our investigation first, we can be trusted to work with a genuinely cooperative company in a professional, mutually respectful manner. We have people who understand your world and speak your language.

Last point then, some examples of the kind of things we might want to discuss with you in terms of framing an investigation when you come and talk to us. These include:

Identifying relevant witnesses;

Agreeing the sequencing of interviewing them with us (we may want to speak to certain people first and we’d like to discuss that with you).

Another example is disclosure to us of the factual elements of interviews you’ve already conducted. You had a choice about whether to conduct those interviews in such a way as to create claims to privilege, but also having done so, a choice whether to assert those claims over the factual content. The way you deal with both of these decisions is something we will consider carefully in the context of your cooperation.

Provision of relevant contemporary documentation is another example; in a timely manner, in a suitable digital format and arranged sensibly.

Alerting us to potentially relevant sources of documentation. If we are obviously interested in a particular issue and serve you with a formal or informal request for documents relating to it, if there is a search term or repository of information that you know about but we don’t — tell us. This is a really good example of pro-active cooperation. . . . That is the difference between cooperating with us, in the way we want, and being investigated by us in the traditional way.

Another example is if you are interviewing someone, either before you’ve spoken to us or after, ask the right questions. I’ve seen transcripts of interviews conducted by law firms that are almost laughable in the way they build up to an issue, set up an obvious and crucial next question, but don’t ask it. If you purport to investigate, you need to do so in a properly inquisitional way.

And finally for now, the handling of data — an entire speech in itself really, but just think about how you do it, bearing in mind the kind of issues we will obviously have to understand — integrity of images, location of data, continuity of evidence, format in which it is supplied etc. These are all things where you have options in what you do, and the ability to make our work simpler.

I don’t mean to use this speech to give chapter and verse on cooperation, so I will just say one more thing.

Really, ask yourself “does what we are about to do make the SFO’s job easier, or harder?” But remember, we will be asking the same question. We know you have choices, and the way you make them says a lot more to us about the extent to which you are really cooperating than any number of lawyers’ letters you send telling us you are.

As I have said many times before, you don’t have to cooperate, but if you say you want to, back it up, really do it; don’t say one thing, but really work to a different agenda. We see straight through that and it doesn’t work.

Pick your horse, and ride it.

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Ben Morgan’s full remarks of October 29, 2015 to the Annual Anti Bribery and Corruption Forum in London are here.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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