Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Does Your Corporate Compliance Program Reasonably Prevent Fraud? New UK Guidance Demands It
In October 2023, the United Kingdom created a new strict liability crime as part of its ongoing effort to clamp down on corporate fraud. Modeled after the UK’s strict liability offenses for failure to prevent bribery and tax evasion, the failure to prevent fraud offense (FTPF offense) holds companies liable for frauds committed by their employees, agents, and other individuals who provide services on their behalf, even if the company did not authorize or know about the fraudulent conduct. Companies do not have to be based in the UK to face liability under the FTPF offense. The statute applies to conduct with a UK nexus or that causes harm in the UK, regardless of where the company is located.
Like the failure to prevent bribery and tax evasion statutes, the FTPF offense includes an affirmative defense: companies that show they had reasonable fraud prevention procedures in place at the time of the alleged misconduct can escape liability. In new guidance released in November 2024, the UK government detailed what it considers reasonable fraud prevention procedures; that is, how a company can establish the reasonableness of its compliance program in order to potentially avoid liability under the FTPF offense.
According to Nick Ephgrave, Director of the UK Serious Fraud Office: “The publication of this guidance means that time is running short for corporations to get their house in order or face criminal investigation.” The good news is that companies that have tailored their compliance programs to the US Department of Justice’s Evaluation of Corporate Compliance Programs (ECCP), which US federal prosecutors use when making corporate criminal charging decisions, have a good head start. The foundational components of effective compliance programs under the ECCP are similar to the reasonable fraud prevention procedures outlined in the UK guidance. However, companies with connections to the UK cannot merely start and finish with the ECCP, which evaluates the effectiveness of compliance programs to identify and prevent criminal misconduct more generally. Rather the UK guidance contains several procedures and best practices specifically geared towards fraud prevention that the ECCP does not include. Companies with UK connections now need to make sure that their compliance programs account for these anti-fraud procedures and best practices as well.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
'Huguenot LLC v. Megalith Capital Group Fund I, L.P.': A Tutorial On Contract Liability for Real Estate Purchasers
In June 2024, the First Department decided Huguenot LLC v. Megalith Capital Group Fund I, L.P., which resolved a question of liability for a group of condominium apartment buyers and in so doing, touched on a wide range of issues about how contracts can obligate purchasers of real property.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.