SFO in fresh blow as Sarclad executives are acquitted16 Jul 2019 22:08
Three men have been acquitted in a case brought by the Serious Fraud Office, marking the latest instance in which the UK agency has signed a plea deal with a company but failed to successfully prosecute top executives. Michael Sorby, Adrian Leek and David Justice were on Tuesday all cleared by a jury at Southwark Crown Court of taking part in a bribery plot for their former employer, metals company Sarclad. Mr Sorby was managing director, while Mr Leek and Mr Justice were senior sales executives at the company. The SFO had agreed a deferred prosecution agreement (DPA) with Sarclad, a kind of plea deal in which the company avoids prosecution by “self-reporting” financial crime, in July 2016. The watchdog has failed to secure individual convictions against three of the company’s former executives, however. It follows the high-profile failure of the SFO’s case against three former Tesco executives in relation to a £250m accounting scandal and its decision to abandon a case against former executives at Rolls-Royce in February. Both companies admitted illegal activity in DPAs. In Tesco’s case, the three individuals pursued by the SFO were alleged to be involved in wrongdoing; however, a judge ruled in January that the SFO’s case was “so weak” that there was no case to answer. Jeremy Summers, partner at Osborne Clarke said: “This is the third case where the SFO has been unable successfully to prosecute senior individuals where their companies had accepted wrongdoing and entered into a DPA.” Recommended Financial fraud UK’s poor record on corporate crime comes under attack The threshold for securing criminal convictions against individuals and corporates is far higher than the level needed to agree a DPA. Andrew Smith, partner at Corker Binning, said: “Historically, individuals have nearly always been more willing to fight the SFO than their corporate employer, which has usually been more risk averse for commercial and reputational reasons.” Questions have been raised, however, over whether corporations will be less likely to agree to deals following the SFO’s apparent difficulty in securing convictions. “The time is surely right for more companies to stand up to the SFO and demand to scrutinise the case against them before agreeing to any criminality, including in a DPA,” said Mr Smith. Neil Williams, director at business crime solicitors Rahman Ravelli, said the Sarclad former executives joined “a growing band of executives who are either proven to be innocent despite agreed wrongdoing or who have not faced the courts due to a reluctance by the SFO to test the integrity of a DPA before a jury”.
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