Debevoise talks corruption with the SFO
October 22, 2009
On Tuesday, Debevoise & Plimpton organised its first ever International Corporate Investigations and Defense (“ICID”) practice annual lecture on the theme of international white collar crime. Richard Alderman, Director of the Serious Fraud Office (“SFO”), gave a presentation on the changing role of the organisation. It was followed by a speech from Paul Berger, litigation partner at Debevoise & Plimpton in Washington and former Associate Director of Enforcement at the Securities and Exchange Commission (“SEC”), on the US system of investigating and prosecuting economic crime. The event, held at the City of London Club, was hosted by Lord Goldsmith QC, former UK Attorney General and now European Chair of Litigation at Debevoise & Plimpton.
In his introduction Lord Goldsmith explained the background for the theme of the lecture: “We have chosen the field of international white collar crime for our first Debevoise ICID lecture, because regulators internationally have dialled up the intensity of their corruption spotlights and because Debevoise has extensive international experience in this area.”
In his former position as the UK Attorney General, Lord Goldsmith had commissioned a review of the SFO’s systems, processes and culture in prosecution cases in comparison with similar institutions in the US. That review identified several weaknesses within the SFO. The SFO has since sought to address these weaknesses through a number of measures, which have led to a dramatic rise in successful prosecutions by the SFO and its first ever corporate bribery conviction several weeks ago.
In his presentation, Richard Alderman, who has been heading the SFO since April 2008, acknowledged the results of the review and unveiled his ambitions for the new SFO: to restore the reputation of his organisation and to rival the performance of its US counterparts such as the Department of Justice’s Office for the Southern Division of New York and the New York District Attorney’s Office.
He commented that: “the key to transformation in the SFO has been the engagement between members of the SFO and the City of London, whether financial or other institutions or professional advisers”. He added: “They talked to us about areas of concern, for instance asset backed securities, hedge funds and private equity. That has led to much of the SFO’s work on cases which are now in the public domain. Those we talked to recognise there is definitely an upside in talking to us.”
The new SFO’s achievements are already showing. The SFO was successful in 17 out of 18 cases taken to court last year and in all cases so far this year. Richard Alderman said: “My perspective is that the public can take the view that the SFO is developing a good track record of successful prosecution.”
Speaking at the same event Paul Berger, a specialist in the enforcement of white collar criminal defense matters in the US, said: “The US has always been at the forefront of white collar crime investigation. The number of cases investigated by the SEC reached 650 last year, and the organisation itself along with the FBI and the government’s fraud division are all expanding. The US is now exporting their investigation model internationally. The SEC has, for example, produced a Memorandum of Understanding to promote investor protection and foster market integrity which has been adopted in 35 countries worldwide and the OECD and the FBI are even running training programmes abroad.”
The Siemens internal investigation, led by Debevoise & Plimpton, is a prime example of a US type investigation in Europe. Paul Berger commented: “Although European prosecutors were not keen to adopt the US model initially, the Siemens investigation helped change their minds, and, at least the Munich prosecutors, have come to value and respect the cooperation they received during that investigation. And for the company, its cooperation with investigators in the US and Germany was crucial to safeguarding its commercial position and helped reduce the fine by more than $1 billion in the end.”
He concluded: “A robust and regularly tested compliance programme is what you need to avoid these situations.”
Debevoise & Plimpton LLP has a world-class practice in the field of regulation, white collar crime, internal investigations and securities related litigation, with unparalleled experience in working on high profile and large scale international investigations, including the representation of the Audit Committee of Siemens AG.
Debevoise & Plimpton LLP is a leading international law firm, representing a wide range of clients around the world. Founded in 1931, the firm has offices in New York, Washington, D.C., London, Paris, Frankfurt, Moscow, Hong Kong and Shanghai. The firm has approximately 750 lawyers.