The Serious Fraud Office (SFO) is a specialized prosecuting authority established in 1987 to deal with the highest level of severe or sophisticated fraud, bribery, and corruption. The SFO covers England, Wales, and Northern Ireland and is part of the UK criminal justice system. However, it does not cover Scotland, the Isle of Man, or the Channel Islands.
The primary goal of the SFO is to protect the reputation and integrity of the public and the UK as an international financial center. To achieve this, the SFO tracks financial gains from financial crimes and pursues serious fraud, bribery, and corruption cases. The unit's formation began with a series of financial scandals in London in the early 1980s, which shook public confidence. In response, the government established the Fraud Cases Committee in 1983, which eventually led to the creation of the SFO.
How Does SFO Work?
The SFO collaborates with other law enforcement partners to address the challenges faced by serious and organized crime, in line with the Government's Serious and Organized Crime Strategy. These partners include the National Crime Agency's Economic Crime Command, International Corruption Unit, and Bribery and Corruption Intelligence Unit, the City of London Police, including its Economic Crime Directorate, Action Fraud, and the National Fraud Intelligence Bureau, UK police forces and Regional Organized Crime Units, Regional Asset Recovery Teams, Regional Fraud Teams, HM Revenue & Customs, and the Financial Conduct Authority.
In addition to its work with UK law enforcement partners, the SFO collaborates with UK Government departments, including the Attorney General's Office, Home Office, and Department of Justice, and overseas partners, such as the US Department of Justice, on matters of common interest. The SFO also participates in Project Bloom, a multi-agency operation to combat scams where people are encouraged to move or cash in their pension pots at significant financial risk or loss.
The SFO has about 60 live criminal cases under investigation and before the courts at any given time. These cases typically involve activity in multiple nations, alleged criminals who go to great lengths to hide their activity and the money they make from it and require analysis of enormous quantities of information. As a result, they take longer than standard criminal cases to investigate and prosecute.
To support its work, the SFO has a core budget and additional funds from the Treasury Reserve. Since 2017, the SFO has the power to investigate and prosecute the new crime of corporate failure to block the facilitation of overseas tax evasion. The SFO's commitment to combating serious and organized crime and protecting the reputation and integrity of the public and the UK as an international financial center is a critical element of the UK criminal justice system.
SFO Notable Cases
Over the years, SFO has investigated and prosecuted several high-profile cases, demonstrating its commitment to tackling serious and organized financial crime. Here are two examples of notable cases that the SFO has successfully pursued:
The LIBOR scandal: In 2012, the SFO began investigating allegations that several banks had manipulated the London Interbank Offered Rate (LIBOR), a benchmark interest rate used to price financial products worth trillions of dollars. The investigation led to charges being brought against several individuals, including former traders and senior executives. In 2015, Tom Hayes, a former trader at UBS and Citigroup, became the first person to be convicted of LIBOR manipulation and was sentenced to 14 years in prison. Several other individuals were subsequently convicted, including former Barclays traders and executives. The LIBOR scandal is widely considered to be one of the biggest financial scandals of recent times.
The Rolls-Royce bribery and corruption scandal: In 2017, the SFO secured a record-breaking £497m settlement with Rolls-Royce, following a four-year investigation into allegations of bribery and corruption involving the company's overseas operations. The investigation uncovered evidence that Rolls-Royce had paid bribes to secure contracts in countries such as Indonesia, Thailand, and India. The settlement, which included a deferred prosecution agreement, was the largest-ever enforcement action by the SFO and sent a strong message that companies must take responsibility for their actions and operate with integrity.
These two cases demonstrate the SFO's commitment to pursuing serious financial crime, regardless of the individuals or organizations involved. The SFO's work in uncovering and prosecuting these cases has helped to maintain the UK's reputation as a financial center and sent a clear message that financial crime will not be tolerated.