SFO Guidance Encourages Companies to Self-Reporting Wrongdoing
Any company that fails to disclose knowledge of wrongdoing will be taking a bigger risk than previously, following new guidance published by the Serious Fraud Office (SFO). The SFO makes clear that self-reporting of suspected fraud or other criminal conduct is a mark of a responsible organisation – a fact it will recognise when deciding what action it will take.
The guidance document urges prompt self-reporting followed by genuine cooperation in order for a company to avoid prosecution. Instead, the c company will be invited to negotiate a deferred prosecution agreement. A company that has not self-reported may also avoid prosecution if it has provided the SFO with “exemplary cooperation”.
The SFO investigates and prosecutes serious or complex fraud, bribery and corruption. In its Annual Report 2023-24, the organisation said it has searched 15 sites; arrested 15 people; taken three cases to trial in the year to 2024 year; and opened six criminal investigations.
The new guidance covers the key areas of self-reporting; expectations around cooperation; and negotiating deferred prosecution agreements.
Its publication coincides with the upcoming introduction (expected 1 September 2025) of the ‘failure to prevent fraud’ offence under s199 Economic Crime and Corporate Transparency Act 2023 (ECCTA). When it’s been introduced, businesses will be expected to implement anti-fraud measures to prevent corporate fraud or risk prosecution.
Self-reporting
Self-reporting is crucially important to the SFO’s intelligence gathering and new investigations. Companies and individual whistleblowers are able to self-report by contacting the SFO directly. In the year to 2025, the intelligence division received and looked into around 1,300 self-referrals.
Any temptation to keep suspected wrongdoing under the radar and not disclose it will prove very unwise. The guidance makes very clear that failure to self-report wrongdoing within a reasonable time of it coming to light is a specific public interest factor in favour of prosecution. What amounts to a reasonable time will depend on the specific circumstances but companies are warned not to wait to fully investigate its suspicions of wrongdoing before make a report.
Note that the SFO is also working towards incentivising whistleblowers in the near future.
Corporate self-reporting is being made easier by way of a secure reporting portal to the intelligence division. The SFO makes clear that where a company self-reports and fully co-operates with SFO investigators, it can expect to be invited to negotiate a Deferred Prosecution Agreement (DPA) instead of facing prosecution (unless exceptional circumstances apply).
‘Genuine’ cooperation is expected. Several factors show the extent of cooperation, and they include preservation of digital and hard copy material, presenting the facts on suspected criminal conduct, identifying potentially relevant third-party material and all individuals involved – both internally and externally.
Note that corporates will not be expected to waive legal professional privilege over material by way of ‘cooperation’.
Once a company has self-reported, the SFO will respond as follows:
· Contact the company within 48 business hours of a self-report or other initial contact
· Provide a decision whether to open an investigation within six months of a self-report
· Conclude its investigation within a prompt time frame
· Conclude DPA negotiations within six months of sending an invite
Reassuringly, the guidance clarifies that it is only in exceptional cases that prompt self-report and full co-operation will lead to prosecution rather than an invitation to negotiate a DPA. SFO director Nick Ephgrave has warned: “If you have knowledge of wrongdoing, the gamble of keeping this to yourself has never been riskier.”
While no mandatory time limits have been placed on organisations to self-report, companies will need to exercise judgement where there are potential indicators of suspected wrongdoing.
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