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Fraud and Regulatory

EDWARD HAYES have been at the very top of the Serious Fraud lawyers in the UK for a number of years. We have massive expertise in all aspects of fraud. We have a fantastic success rate which is recognised globally. We win our cases because of thorough preparation and our knowledge, experience and dynamism.

Our services include:
  • Defending all allegations of Fraud and Serious Fraud in the UK and worldwide
  • Legal advice on Fraud prevention and management
  • Representing witnesses in fraud cases, often with an international dimension
  • Representation in restraint and confiscation proceedings under the Civil Fraud Provisions of Proceeds of Crime Act
  • Representation and advice in all types of Regulatory, Disciplinary  and Civil investigations
  • Helping to trace, preserve and recover the proceeds of fraud including stolen money and assets. Asset tracking and recovery is a particular expertise and often involves cross boarder and international issues.
We are experienced in dealing with all types of fraud including Ponzi schemes, boiler room fraud schemes, corruption and misconduct in public office, conspiracy to defraud, money laundering, fraud involving trusts, VAT, MTIC, carousel and direct tax fraud.

We regularly represent senior corporate officers and leading business entrepreneurs in national and international criminal and regulatory investigations.

LIBOR Reform April 2013

Reforms of the LIBOR system have been introduced as a direct result of widespread allegations of Libor Fraud and manipulation and the ongoing investigations involving the US Department of Justice, the CFTC, the SEC and the FBI and in the UK, the FCA and Serious Fraud Office.  Since mid-2012, various proposals have been published in relation to the regulation and supervision of LIBOR and its European counterpart, EURIBOR.

The Wheatley Review Results 2013 - as a result of reported Libor manipulation relating to the setting of LIBOR, in July 2012 the UK government instructed Martin Wheatley MD of the Financial Services Authority (FSA) now expensively renamed as the Financial Compliance Authority (FCA) to conduct a review into the setting of LIBOR.

The Wheatley Review has produced a plan for the reform of LIBOR, which includes the following recommendations:
  • a new independent body should take over the responsibility for the administration of LIBOR and produce a Code of Practice to govern the LIBOR submission process;
  • The submission and administration of LIBOR, as well as key individuals responsible for this, should be regulated by the FCA;
  • The FCA should be given the power to make rules in relation to the submission of LIBOR, with reference to the new Code of Practice;
  • LIBOR submissions should, generally, be supported by transaction data and written records;
  • The FCA should be given power to allow it to bring criminal prosecutions for LIBOR manipulation.
These recommendations are designed to enhance the FCA’s ability to implement rules that help ensure the integrity of the LIBOR submissions process, as well as allowing the FCA to supervise and take enforcement against firms and individuals who are involved in the LIBOR submission process.

The Financial Services Act 2012

The Financial Services Act 2012 makes major changes to the regulation of LIBOR. The Act introduces;

The criminal offence of making misleading statements (s397 of the Financial Services and Markets Act 2000 (FSMA)) is now replaced with three criminal offences (Part 6A of the Financial Services Act 2012). The first two of these offences replicate the existing offences of making misleading statements in ss397(2) and (3) FSMA. The new third offence relates to the making of false or misleading statements, or the creation of false or misleading impressions in relation to LIBOR.

The legislation leaves it open for the Government to introduce additional benchmarks as to what constitutes ‘regulated activity’.

In the event that the Government does decide to incorporate additional benchmarks, the definition of “benchmark” for the purpose of determining whether an activity is a regulated one is  wide (s22(6) FSMA, as amended by the Financial Services Act 2012). It includes an index, rate or price that is used for one or more of a range of purposes (such as to measure the performance of investments) with no requirement that this purpose be its main or dominant purpose!

The FCA has introduced rules and guidance for the submission and administration of LIBOR in a new section of the Handbook – “General Guidance on Benchmark Submission and Administration” (BENCH). This covers systems, controls and codes of practice of Banks and individuals responsible for submitting LIBOR.

In relation to approved persons, the FCA has created two new SIF Controlled Functions for individuals who administer LIBOR (CF50 – benchmark administration function) and individuals who submit LIBOR (CF40 – benchmark submission function). It is also envisaged that, in addition to the new SIF Controlled Functions, those people who are responsible for administering or submitting LIBOR may also fall within the following SIF controlled functions: Director (CF1), Non-Executive Director (CF2) and Chief Executive (CF3).

In July 2012, the European Commission announced various amendments to its proposals for a Regulation and Directive on insider dealing and market manipulation which are intended to prohibit the manipulation of benchmark rates such as LIBOR and EURIBOR and make such manipulation a criminal offence. However, the UK has not at present opted in to these additional rules. The biggest current threat to individual Bankers and Brokers involved with LIBOR are the US regulators. Fitness to practice issues in the UK are also arising regularly.

The current investigations are ongoing and if you are involved and require ILA independent Legal Advice you should not hesitate to contact Edward Hayes as we have enormous expertise in this specialist regulatory area.

Contact Us

Tel: 01903 288850
Tel: 01243 781431
Tel:  01243 672124
Emergency: 07712 815169
Fax: 020 7427 7391

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