Chapter 19 Flashcards
Instances which constitute a criminal offence
- Failure to comply with auditor’s request for information
- Trading as a public company without a section 761 trading certificate
- Failure by a director to disclose interest in a company contract
- Fraudulent trading
- Insider dealing
- Money laundering
- Misleading, false or deceptive information in audit reports
- Breach of a disqualification order
What is stated under the Bribery Act 2010
it is a criminal offence for a person to seek, take, offer or give a bribe in a relevant function or activity - any function of public nature, any activity related to business. any activity performed by persons, any activity in the course of one’s employment
The Bribery Act covers bribery committed where
In the UK
Outside the UK even if it is not illegal in that country if the person is a british national, a UK corporation or a national of a british overseas territory
Does the Bribery Act cover bribery committed outside the UK by foreign companies, partnerships or subsidiaries?
No
An individual found guilty of bribery offence is liable to an unlimited fine and may be sent to prison for up to 10 years
True
Organizations found guilty of bribes are liable to unlimited fine and may be barred from entering future public contracts. Assets acquired through bribery can be confiscated
True
Bribery act recognises 4 offences
Bribing someone else (Active bribery)
Being bribed or seeking a bribe (passive bribery)
Bribing a foreign public official
Organizational failure to prevent bribery
The act covers monetary, non monetary bribes, no low limit bribes and does not apply to genuine hospitality that is reasonable and proportionate.
True
How does an organization fail to prevent bribery?
if it does not have adequate procedures to prevent it and person associated bribes another person intending to obtain business advantage in the conduct of the business.
Guidance from the Secretary of State for Business, Innovation and Skills (BIS) states that the “adequacy” of an organisation’s anti-bribery provision should be judged against the bribery risks it faces and the nature, size and complexity of its business.
True
Guiding principles for organization’s anti bribery arrangements
Proportionate procedures
Top level committment
risk assessment
due diligence
communication
monitoring and review
Deferred prosecution agreement
an agreement between a prosecutor and an entity that the prosecutor is considering prosecuting for an “alleged offence”.
Insider dealing
using inside information to gain advantage when dealing in securities. It can be seen as market abuse and is an example of abuse by directors, or others, of their position of trust and confidentiality.
Inside information
price-sensitive information relating to the issuer of securities (i.e. information which if made public would significantly affect the market price of those securities).
Securities
price-affected shares or debentures in a company;
Price affected
securities whose price would change significantly if the inside information were made public.
Dealing
acquiring or disposing of relevant securities, or agreeing to acquire or dispose of them.
Insiders
people who know they have inside information from an inside source.
What must the prosecution proved for insider dealing?
The insider dealt in the price-affected securities;
encouraged someone else to deal in them; or
disclosed the information and enabled it to be used by a person dealing in them.
What is encouragement
an offence if one encouraged another or hadcause to believe that dealing would take place regardless of:
if the person encouraged knows that the securities are price-affected;
how the encouragement is given; or
whether any dealing took place.
Penalty for insider dealing
seven years’ jail and/or an unlimited fine.
Do share dealings in insider dealing remain valid?
yes, it would be too complex to unravel them,
Valid defences from individuals accused of insider dealing
- not expecting to make a profit
- reasonable grounds that the information was already public
3.going to deal the securities without the information
Magistrates court
lowest level of criminal court in the English court system.
Placement, layering and integration are the three stages of what offense?
Money laundering
