CHAP 19 Fraud

Question 1

Bribe

Answer 1

Under BA10, a criminal offence for a person or organisation to seek, take, offer or give a bribe in a “relevant function or activity

Question 2

relevant function or activity is

Answer 2

any function of a public nature;
any activity connected with a business;
any activity performed in the course of a person’s employment; or
any activity performed by (or on behalf of) a body of persons.

Question 3

The Act covers bribery committed:

Answer 3

in the UK:
outside the UK

Question 4

The Act does not cover bribery committed outside the UK by:

Answer 4

-a foreign subsidiary company of a UK corporation; or
-a foreign company or partnership.

Question 5

An individual who is found guilty of a bribery offence is

Answer 5

Liable to an unlimited fine and may be sent to prison for up to 10 years.

Question 6

An organisation found guilty is liable

Answer 6

An unlimited fine and may be prohibited from entering into public contracts in future.
Assets which the company acquired through bribery can be confiscated.

Question 7

The Bribery Act recognises four offences:

Answer 7

Bribing another person (active bribery);

Being bribed or seeking a bribe (passive bribery);

Bribing a foreign public official; and

Organisational failure to prevent bribery

Question 8

Secretary of State gives six guiding principles for organisations’ anti-bribery arrangements:

Answer 8

Proportionate procedures

Top-level commitment to prevent bribery

Risk assessment by mgmt to exposure to bribery.

Due diligence

Communication: Communication and training enhance awareness and help to deter bribery.

Monitoring and review of procedures

Question 9

Deferred Prosecution Agreements

Answer 9

agreement between a designated prosecutor and an entity that the prosecutor is considering prosecuting for an “alleged offence”.

Question 10

DPA is available to

Answer 10

companies, partnerships and unincorporated associations, not available to an individual.

Question 11

DPA is available

Answer 11

at the invitation of the prosecution; an entity cannot claim as a right

Question 12

If the entity breaches any of the conditions in the DPA

Answer 12

Prosecution is resumed

Question 13

DPA Financial conditions may include

Answer 13

to compensate victims;
to donate money to a charity;
to pay a financial penalty to the prosecutor

Question 14

Non-financial conditions may include

Answer 14

Implementing a compliance programme

and/or cooperation in any related investigation.

Question 15

Insider dealing

Answer 15

using inside information to gain advantage when dealing in securities.

Question 16

Offence : ID

Answer 16

The prosecution must prove (as always in criminal law, beyond reasonable doubt) that the insider:

-dealt in the price-affected securities,
-encouraged someone else to deal in them
-disclosed the information and enabled it to be used by a person dealing in them.

Question 17

Penalties and Consequences
: ID

Answer 17

currently seven years’ jail and/or an unlimited fine.

Question 18

Defences for Insider dealing

Answer 18

1. He did not expect to make a profit for himself or avoid a loss.
2. Had reasonable grounds to believe that the information had already been made public.
3. He was going to deal in the securities anyway without the information
4. In disclosing the information, he did not expect:
   any person to act on it; or
   the dealing to result in a profit or avoid a loss

Question 19

Financial Services Authority (FSA)

Answer 19

has power to impose financial penalties for market abuse

Question 20

Mrket abuse

Answer 20

-Misuse of info
-Misleading statements and impressions; or
-Market distortion.

Question 21

Misleading statement

Answer 21

Making information available that is likely to give a false or misleading impression about the supply or demand, or price or value of an investment.

Question 22

Market distortion

Answer 22

-interference with the normal process of supply and demand of shares; or
-improper interference with the price of shares by the manipulation of their price to a distorted level

Question 23

Money laundering

Answer 23

Exchanging criminally obtained money or other assets for “clean” money or other assets with no obvious link to their criminal origins

Question 24

“money laundering” is widely defined to include:

Answer 24

Possessing
Dealing
Concealing
the proceeds of any crime (CRIMINAL PROPERTY)

Question 25

ML also includes

Answer 25

-an attempt or conspiracy or incitement to commit such an offence;
-aiding, abetting, counselling or procuring the commission of such an offence; or
-an act which would constitute any of these offences if done in the UK.

Question 26

ML also include

Answer 26

Fail to inform the National Crime Agency (NCA), or Money Laundering Reporting Officer (MLRO),

Question 27

Criminal property includes:

Answer 27

proceeds of tax evasion
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