On September 3, the new Director of the United Kingdom Serious Fraud Office (SFO), Lisa Osofsky, gave a speech at the Cambridge International Symposium on Economic Crime 2018. Because Osofsky gave the speech during her first week in office, it provides the first specific indications of her initial approach to leading the SFO.
Osofsky first cited her background as a former U.S. federal prosecutor, and her experience in working collaboratively across jurisdictions, agencies, and business sectors, in asserting, “That’s the way to make strong cases – cases with impact. The most complicated and difficult cases, the cases the SFO makes and will continue to make, require it.” She stated that what she envisions for the SFO over “at least the next months” is “to build on our successes with taking on and cracking the most complex and difficult crimes and bringing these cases to trial or, if appropriate – if in the public interest – to resolution through [Deferred Prosecution Agreements (DPAs)] . . . [b]y using an active and engaged approach to the following areas”:
- Cooperation: Osofsky cited five categories of cooperation:
- International – On this point, she stated that “[s]trengthening and deepening the relationships that make [global settlements like the $800 million Rolls-Royce resolution] happen is going to be a major focus for me.” She also briefly mentioned “[w]orking with the newcomers to DPAs – [France and its] Sapin II [legislation], Argentina, Canada, Australia,” and the SFO’s hosting of secondments and exchange programs for enforcement authorities.
- National law enforcement –She noted that the SFO would be seconding staff to the National Economic Crime Centre now being built out within the National Crime Agency, with which she stated her intention to continue to work. She also mentioned regional and local police forces, especially the City of London Police, and deemed HM Revenue and Customs “a natural ally . . . as we could build very strong cases together.”
- Regulators – She referred to UK and U.S. financial regulators as “valuable allies.”
- Non-Governmental Organizations – She stated that “[c]loser work with non-governmental organisations and others on the ground who have a wealth of experience and information is also a priority.”
- Private sector – She said that she aims “to leverage the information [that financial institutions and companies] hold to help us in law enforcement build strong cases,” and to use the expertise of the legal sector and academia.
- Technological Solutions: Osofsky stated her intention to focus “on the SFO’s strategic use of cutting edge technology.” She cited the SFO’s current uses of artificial intelligence and e-discovery technology, and added that her aim is “to build our [strategic intelligence] capabilities through the use of dedicated intelligence analysts and by strengthening our capabilities to deal with both human intelligence sources and internet intelligence in our investigations.”
- Encryption: Noting the challenges that encryption of digital devices poses to law enforcement, Osofsky said that the SFO is interested in working with technology companies and both UK and non-UK law enforcement on the issue.
- Proceeds of Crime: Osofsky stated that the SFO “will also continue to prioritise the recovery of criminal proceeds,” in conjunction with partners such as the National Crime Agency and the City of London Police.
With regard to DPAs, Osofsky briefly commented that when considering resolutions short of trial such as DPAs, the SFO must analyze whether the company under investigation “has a credible and colourable defence” under Section 7 (the corporate “failure to prevent bribery” offense) of the Bribery Act 2010, with reference to three key issues: (1) “Has the company engaged in proactive efforts to clean house and to reform?”; (2) “Has the company instilled the right controls?”; and (3) “Are these backed by demonstrable commitment at the appropriate level?”
Osofsky concluded by stressing that her approach to the job would be proactive and that her goal “is to make sure our country is a high risk place for the world’s most sophisticated criminals to operate.”
Note: As this speech was her first in identifying her priorities for the SFO, Osofsky’s remarks hold few surprises. Most of her principal priorities – public- and private-sector cooperation, technological solutions, and pursuing proceeds of crime – are issues that the SFO has been pursuing for some time. They therefore appear to represent incremental, rather than fundamental, changes in how the SFO does business.
Osofsky has the advantage of inheriting an agency whose reputation and future appear considerably brighter than when her predecessor, David Green, came to office in 2012. Given Green’s considerable accomplishments in steering the SFO through legal, political, and reputational challenges and negotiating several notable DPAs, Osofsky could afford in this speech to focus on organizational and process issues that are mostly uncontroversial.
What Osofsky understandably did not address are several more complex and challenging issues that she understands full well could play a significant role in defining her tenure:
- Conduct of Investigations and Litigation: The SFO already has underway a number of high-visibility fraud and bribery investigations and cases that will require Osofsky’s close attention, such as Airbus and Unaoil. In addition, the SFO has not fully established that it is a force to be reckoned with in the courts. While the SFO can fairly point to various trials in which it secured convictions, its mixed record in other litigation — such as the LIBOR prosecutions and the September 5 decision by the Court of Appeal on the scope of legal professional privilege — are unlikely to quiet some of the SFO’s critics. In the longer term, taking more cases to trial and winning them will be important if Osofsky is to retain political support for the more than 50 percent increase in the SFO’s core budget, which was agreed at a time when other UK police and prosecutive agencies have suffered severe and continuing austerity-driven cutbacks.
- Corporate Criminal Liability Standard: In recent years, both Green and SFO subordinates have publicly supported revision of the UK standard of corporate criminal liability. The UK Parliament has already twice adopted legislation creating corporate “failure to prevent” offenses, in the Bribery Act 2010 and the Criminal Finances Act 2017, and the UK Government has considered extension of the “failure to prevent” concept to other offenses such as fraud and money laundering. Osofsky will need at some point to decide whether to continue or revise her predecessor’s support for such revisions.
- SFO-NCA Merger: Finally, although not an immediate threat, the idea of merging the SFO into the NCA, which was set aside after last year’s UK election, remains a potential risk for Osofsky and the SFO. Early and continuing successes with her priorities, and with SFO investigations and cases, will be key to warding off that threat.