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Risky business

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As a result of the Criminal Finances Act 2017, there are new risks for directors and officers and their insurers. Jonathan Newbold & Marlene Henderson investigate.

The recent implementation of the Criminal Finances Act 2017 (CFA) marks the latest legislative crackdown on corporate financial crimes. The CFA has extended the powers of law enforcement agencies to recover the proceeds of crime (including tax evasion, money laundering and terrorist financing) and introduced a strict corporate accountability. The additional scrutiny on corporations and their senior management team is likely to have a knock on effect for D&O policy holders and their insurers.

Criminal Finances Act – what is it?

The CFA, which came into force on 30 September 2017, is fine tuning the approach towards financial crime and extending the powers set out in the Proceeds of Crime Act 2002. The driving force behind the CFA was growing concern about levels of tax evasion and a lack of accountability by senior management.

What does the Criminal Finances Act 2017 cover?

In short, and most significantly

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NEWS
The Law Society RFC Festival of Sport returns next month, bringing together legal and financial services professionals for one of the sector’s largest annual sporting events
Legal aid deserts leave almost one in four without adequate access to justice
The Solicitors Regulation Authority (SRA) has warned solicitors and law firms that using artificial intelligence does not alter their professional obligations, amid concerns over inaccurate legal material and client confidentiality
From forgotten interest claims to case-management appeals, a string of procedural developments offers useful—and occasionally cautionary—lessons for practitioners

Jonathan Fisher KC highlights that it now accounts for around 40% of criminal offences, with roughly 70% involving technology, and argues that the UK cannot simply prosecute its way out of the problem. Detection, investigation and prosecution all require improvement, while different fraud types demand tailored responses.

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