From Covid Bounce Back Loan Fraud to Cryptoassets
- 2023’s Top Trends In Corporate Crime And Financial Investigations
LONDON – The Investigations and Resolutions team at leading Chambers 4-5 Gray’s Inn Square predicts key trends.
1. Public inquiries
The Public Inquiries team at 4-5 Gray’s Inn Square has long been associated with high profile and sensitive Public Inquiries. Ramya Nagesh, a barrister who has worked on some of the largest inquiries and inquests of the last decade, including the Undercover Policing Inquiry, the Grenfell Inquiry, the Post Office Inquiry and the Hillsborough Inquests, is clear this area isn’t likely to slow down next year:
“In 2010, the number of simultaneously open public inquiries reached its peak at 16 concurrent open inquiries. Over ten years later, it would be fair to say that the appetite for inquiries has not significantly diminished. In the last few years alone, we have seen the Grenfell Inquiry, the Undercover Policing Inquiry, the Infected Blood Inquiry, the Independent Inquiry into Child Sexual Abuse and we are soon to see the start of the UK Covid-19 Inquiry.”
2. Cryptoassets go mainstream
Rowena Wisniewska Sethi, a barrister specialising in financial regulation, predicts increased regulation on crypto will bring a real need for better understanding of blockchain and DLT (blockchain-based registration system).
She says: “Over the next year, the focus in crypto is likely to be not only on the virtual assets themselves but on the clever ways we can use DLT; for example, as a ‘block’ storage mechanism for digital records across a network, and bulk storing smart contracts (such as travel insurance). HM Treasury announced in April that it will bring stable coins into the UK regulatory perimeter; we will also see an increasing focus on the regulation of some cryptoassets in financial services. Ultimately, this means that cryptoassets are likely to become more mainstream as a form of payment and so it will be important for advisors to have a deep understanding of blockchain and the uses of DLT as well as how cryptoassets are stored and regulated.”
3. Billions in Covid bounce back loan fraud
One area likely to be under scrutiny is fraud emerging from the Government’s Covid-19 financial support packages.
White-collar crime expert barrister Raoul Colvile, says:
“Around £47 billion of loans were issued, and it is estimated that around 11% (£4.9 billion) were potentially fraudulently obtained. From a legal perspective, there are various routes that may be open to enforcement agencies, in both the criminal and civil spheres. There is obvious scope for fraud charges, and there are examples of Account Freezing Orders being obtained. Outside the criminal sphere, director disqualifications, bankruptcy restrictions, and winding up petitions have all been pursued.”
A barrister specialising in investigations, Max Shephard, says: “The government recently announced that it will be closing down the Taxpayer Protection Taskforce, a unit charged with the recovery of stolen money from Covid support schemes, in March next year. Given the ongoing cost of living crisis, and the highly political nature of preserving public funds, it will be interesting to see what lies ahead in a counter-fraud landscape.”
4. Non-financial misconduct
In the aftermath of both MeToo and 2020’s racial justice protests, there will continue to be scrutiny on non-financial forms of misconduct, including sexual misconduct, racism and bullying or harassment.
Public and regulatory law expert Thomas Francis, says: “In recent years the FCA has opened several investigations into alleged non-financial misconduct, of which some high-profile examples include the financial penalty imposed on the former CEO of Barclays in relation to attempts to unmask a whistle-blower and the prohibitions sought and obtained against three IFAs convicted in 2018 of serious sexual offences. This heightened focus, carrying with it the possibility of enforcement action, has had an industry-wide effect – and will continue to do so over the coming years.”
5. The battle against money laundering in offshore jurisdictions
Nikesh Pandit, a barrister specialising in financial services, says: “Our barristers are regularly instructed by offshore clients, including offshore financial regulators. A key area of instructions in this regard is anti-money laundering (AML) and combating terrorist financing (CTF) investigations. This reflects an increasing drive in offshore jurisdictions to counter money laundering and the financing of terrorism through the implementation of international standards and enhanced resources for national authorities to take action.”
Regulatory specialist Iulia Şaran, says: “Whilst challenges remain, recent MONEYVAL (Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism) reports have highlighted improvements. For example, the application of corrective sanctions for infringements of legislation in Gibraltar, Estonia, Jersey and Malta, which aim to make sanctions for violations of anti-money laundering standards more effective and dissuasive. Jersey has been recognised for introducing a digital register which leverages AI technology and third-party KYC (Know Your Client) data for improved vetting of beneficial ownership and control.”
FOR MORE INFORMATION CONTACT Kathryn Adamson, [email protected], Mobile (+44) 0771 713 3595
NOTES TO EDITORS
4-5 Gray’s Inn Square is a leading public and commercial law chambers. The core areas of law are public, commercial, planning & property, dispute resolution, international, regulatory & disciplinary and sports. The Investigations & Resolutions team has considerable expertise in different regimes and sectors. In particular, our business crime and financial regulation specialists have significant first-hand experience of working with prosecutors and regulators at every stage. In addition, 4-5 Gray’s Inn Square’s public inquiries team have been involved in some of the most notable cases in recent times.