‘One eye across the Atlantic’ - The UK SFO Director’s Maiden Speech and Recent Visits to the United States Underscore the Importance of Future UK-US Collaboration and the US Corporate Criminal Enforcement Model


The Director of the UK Serious Fraud Office (SFO), Nick Ephgrave QPM, delivered his maiden public speech on February, 13, 2024, closely followed by visits to key financial centres in the United States to meet with representatives of the US Attorney’s Office for the Southern and Eastern Districts of New York and the US Department of Justice, Criminal Division, “to discuss future collaboration and our shared commitment to combating fraud, bribery and corruption.” Certain key aspects of the Director’s wide-ranging speech explicitly reference the US criminal justice system as a template for the United Kingdom and dovetail with the SDNY’s recently announced Whistleblower Pilot Program.

This alert considers some of the key issues arising from the Director’s ambitious plans to pay whistleblowers and turn defendants into cooperating witnesses and the recent overhaul of the UK’s statutory corporate crime regime that now make it easier for the SFO to investigate and prosecute corporate crime in the UK, including wrongdoing committed by large US companies with a UK nexus.

Collaboration partner of choice

The Director’s visits to meet with law enforcement colleagues at the DOJ, EDNY and SDNY should be viewed alongside his ambitions for future close collaboration made clear in his speech: “I aspire for us to be the collaboration partner of choice, both in this country and abroad.” The importance and closeness of the working relationship between the SFO and its US counterparts, particularly the DOJ, has been a stated priority for successive Directors, with mixed results. While the desire for close collaboration was ever-present in the latter part of the previous Director’s tenure, practically that on occasion meant the SFO deferring to the DOJ or, indeed, discontinuing cases with a strong UK jurisdictional nexus, allowing the DOJ to proceed instead of pursuing a combined UK-US resolution.

The Director’s US visits are therefore not only of symbolic but also practical value, particularly given that two key aspects of his speech—his proposals to pay whistleblowers and turn more defendants into cooperating witnesses in return for immunity or a reduced sentence—sit squarely alongside the SDNY’s recent offer of non-prosecution agreements (NPAs) to individuals who disclose timely information engaged in certain specified criminal misconduct.

More whistleblowers and cooperating witnesses?

The Director’s speech included two noteworthy proposals as a means of allowing the SFO access to “smoking gun” evidence as part of his commitment to speeding up SFO cases, both of which explicitly acknowledge their debt to the US corporate criminal enforcement model.

First is the Director’s desire to pay whistleblowers:

“If you look at the example of the United States of America, their system allows that [paying whistleblowers], and I think 86% of the $2.2 billion in civil settlements and judgments recovered by the US Department of Justice were based on whistleblower information.”

Second is the Director’s desire to encourage and make use of defendants as cooperating witnesses in support of SFO investigations and prosecutions:

“In the US, it is done without any question. My own research suggests that over here the use of the Serious Organised Crime and Police Act [SOCPA] is not well-developed. We seem reluctant, culturally, to do it. It is not used very often and yet the benefits are enormous, both to the defendant, who could get a reasonably decent reduction in sentence, and to us, as it can provide us with the evidence we need to prosecute a case more quickly.”

The Director has not explicitly confirmed the influence of the SDNY’s pilot program on his own thinking, but both share the same principled underpinning: to encourage and reward those on the inside of corporate wrongdoing to share information with law enforcement (whether by paying them or reducing their sentence per Ephgrave’s ambitions or granting them immunity by way of NPA per the SDNY’s program).

Rewarding whistleblowers in the UK is not a new concept, albeit there has always been a general cultural hesitancy in relying on evidence obtained through financial reward. The Competition and Markets Authority offers financial rewards for information about cartel activity (and actively encourages whistleblowing through its leniency program), and His Majesty’s Revenue & Customs pays whistleblowers sharing information about tax fraud. While the Financial Conduct Authority (FCA) encourages whistleblowing both directly to it and within the firms it regulates, it does not provide financial rewards for information received. Statistics show that the FCA’s whistleblowing regime is markedly less successful than one of its US counterparts, the Securities and Exchange Commission, which does offer financial rewards to whistleblowers.

With regard to making increased use of cooperating witnesses, the Director is right to acknowledge that the SFO and other prosecuting agencies in the UK have made only limited use of SOCPA to secure the evidence of cooperating witnesses by granting immunity or offering a reduced sentence in return for cooperating. There are, however, several good reasons for the limited use and efficacy of such evidence in the UK, not least the risk to the prosecutor of bringing a prosecution based on the evidence of an individual whose integrity is relatively easily undermined (testimony said to have been bought by way of the offer of a reduced sentence) and the risk to the potential witness of cooperating with a prosecution that ultimately fails or results in not guilty verdicts for their co-accused (in addition to the personal trauma of cooperating with a live investigation for a period of several years before potentially ultimately giving evidence in multiple court cases).

Renewed focus on fraud includes large US domiciled companies

The passing into law of the Economic Crime and Corporate Transparency Act (the Act) in October 2023 brought with it a radical overhaul of the corporate criminal liability landscape in the UK and will increase the likelihood of companies, domiciled in the UK and abroad, being successfully prosecuted in the UK for economic wrongdoing. Central to this is the introduction (anticipated in the second half of this year) of a strict liability “failure to prevent fraud” offence. The Director could not have been clearer in his speech: “I want to be the first to prosecute someone under the new provisions of the Economic Crime and Corporate Transparency Act.”

A relevant corporate entity (company or partnership) will be guilty of the new failure to prevent fraud offence if a person associated with it (an employee, agent, subsidiary or other person performing services on its behalf) commits a specified fraud offence intending to benefit the entity or anyone else to whom, or to whose subsidiary undertaking, the associate provides services on behalf of the entity. Liability can also attach to the parent entity in a corporate group if the fraud was committed by an employee of a subsidiary for the benefit of the parent.

The Act itself is silent on the potential extra-territorial jurisdictional reach of the new offence. However, the UK Government’s policy document accompanying the draft (as it was then) legislation is clear that the intended jurisdictional scope is broad: “If an employee commits fraud under UK law, or targeting UK victims, their employer could be prosecuted, even if the organisation (and the employee) are based overseas.” A large US-based company, for example, whose employee commits fraud in the UK, or targets UK victims, for the company’s benefit would, in the absence of being able to establish that it had reasonable fraud prevention procedures in place, potentially be liable under the new offence.


Only in post since September 2023, Ephgrave has made a promising start to his tenure as Director, effectively reinvigorating and refocusing the SFO. Looking to law enforcement colleagues in the United States for inspiration and closer future collaboration is not without difficulty but is certainly a positive first step towards the SFO becoming, as the Director himself terms it, “an organisation that is characterised by its strength, its dynamism, its confidence and its pragmatism.” 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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