Even after reaching another deferred prosecution agreement, the U.K. Serious Fraud Office has yet to provide strong incentives for companies to come forward when uncovering wrongdoing, said some corporate crime lawyers, The Wall Street Journal reported.
"A deferred prosecution agreement [DPA] is terribly difficult to achieve and I’m not convinced that a company accepting a DPA, as a general rule, is financially better off than seeking an early guilty plea," said White & Case partner Jonathan Pickworth, "The SFO seems to have discarded the much more flexible tool of entering into civil settlement with companies that see the light and self-report."
The SFO agreement in July with an unnamed small- to medium-sized company is the second DPA since they were added in February 2014. The company was ordered to pay 352,000 pounds in a penalty, and to disgorge 6.2 million pounds of profit, the Journal reported. Although the SFO has said it intends to use DPAs to reward companies that cooperate fully, the penalties don’t provide much of an incentive for self-reporting, said Pickworth.
"If the SFO is dangling a DPA in front of companies to encourage them to self-report, it is dangling the wrong thing because it doesn't seem to be enough carrot and too much stick," he said.
There was more of an incentive to disclose findings of wrongdoing before David Green took over as director of the SFO in 2012, as civil settlements were achieved more frequently, said Pickworth.