Central Criminal Courts image
This site is based on Disciplinary and Regulatory Proceedings, 8th Edition
Disciplinary and Regulatory Proceedings is the leading work on this important and dynamic area of law. For 20 years it has provided authoritative guidance to lawyers, tribunals, and other experts dealing with professional discipline and regulation.

The power of the FSA to prosecute

ROLLINS, R. v. [2009] EWCA CRIM. 1941

CASE NOTE

1. The Court of Appeal has held that the FSA are able to bring private prosecutions under the Proceeds of Crime Act 2002 (POCA).
2. Two Defendants Mr Rollins and Mr McInerney were charged variously with insider dealing contrary to section 52 of the Criminal Justice Act 1993 and money laundering contrary to POCA. Mr McInerney was charged for breaching the general prohibition not to carry on a regulated activity without FSA authorisation or exemption contrary to 23 of the Financial Services and Markets Act 2000 (FSMA) and money laundering to POCA. The FSA had express powers to prosecute for breach of the general prohibition pursuant to section 401 of FSMA and express part to prosecute insider dealing pursuant to section 402 of FSMA. However no such express power existed to prosecuted offences express power existed to prosecute offences under POCA.
3. The Appellant asserted that in the absence of an express power the FSA did not have the power to bring a prosecution under POCA as those offences had not been specified within section 402 of FSMA. The Court of Appeal rejected the Appellant’s submissions and held that the FSA had characteristics similar to any other body corporate and therefore was able like any other company or individual to bring a private prosecution.
4. The Court held that it could not have been the intention of Parliament to deprive in particular the FSA of the ability to bring prosecutions in relation to ancillary offences or offences connected with other offences over which prosecutions were brought under an express power. The Court specifically held (paragraph 20) as follows:

“Section 11 of FSMA 2000 does not state that the FSA’s functions are to be limited to those conferred on it by or under the Act. The section simply states that the FSA is to have those functions. Nor do the other provisions of section 1 or schedule 1 restrict the powers of the FSA in such a way as to deprive it, or to prevent it from performing, functions other than those conferred on it by or under the Act. Section 1, subsection 4, which refers in the context of the Banking Act 2009 to functions of the FSA “whether generally or under this Act”, plainly contemplates that the FSA has wider functions. In any event if the legislative intention had been to cut down the powers of the FSA so as to limit it to the functions conferred by or under FSMA 2000, clear and express language would have had to be used for the purpose; and in the absence of such language the statute cannot in our view be interpreted as having that effect.” … nor (paragraph 22) “nor do sections 401 and 402 preclude an independent power on the part of the FSA to institute proceedings for offences other than those expressly referred to in those sections.”
See also R (Uberoi) v. City of Westminster Magistrates Court [2008] EWHC 3191 (Admin).

5. The Court went on to state (at paragraph 24) that section 402 has a similar effect in relation to the offences under the legislation specified in it. It stated that section 402 empowers the FSA to prosecute those offences without obtaining the consent of the DPP.

6. Further the FSA claims to be exercising the right of private prosecution in prosecuting offences under the Proceeds of Crime Act 2002. That right was expressly preserved by section 6 of the Prosecution of Offences Act 1985 and that right was further confirmed in the decision of the House of Lords in Hones v. Whalley [2007] 1 AC 63. The view of other Courts in the case of R (Ewing) v. Davies [2007] EWHC 1730 (Admin) of Mitting J was that “if the right of private prosecution is to be taken away or subjected to limitation, it is for Parliament to enact and not for the Court by decision to achieve”. The prosecution was further underscored by Lord Wolfe CJ in R (Hunt) v. Criminal Cases Review Commission [2001] QB 1108 in support of the common law power of the Inland Revenue Commissioners to bring prosecutions as follows:

“Great importance has always been attached to the ability of an ordinary member of the public to prosecute in respect of breaches of the criminal law. If ordinary member of the public can bring proceedings of breaches of the criminal law, it will be surprising if the Inland Revenue (and therefore the FSA) were not in a similar position”

7. In R ((Uberoi) v. City of Westminster Magistrates Court (Cited above) it was submitted on behalf of the FSA, as in the present case, that the FSA is entitled as a private person to institute criminal proceedings without the need to seek that power from statute.

8. The Court of Appeal re-affirmed the authorities in underpinning the FSA’s right to bring private prosecutions in this manner (paragraph 30) “for our part, we can see no reason why the general right to private prosecution should not be enjoyed by the FSA. The right is not excluded by FSMA 2000 or any other statutory provision to which our attention has been drawn, and the powers conferred on the FSA by its memorandum of association are easily wide enough to confer to cover the institution of criminal proceedings within the scope of its objects”. The conclusion of the Court was therefore that the FSA does have the power to prosecute offences beyond those referred to specifically in sections 401 and 402 of FSMA 2000 and in particular the power to prosecute the Appellants for offences contrary to sections 327 and 328 of POCA 2002. It further remarked that it is sensible that the FSA should be capable of bringing offences which form part of the same pattern of criminality allied to those which the FSA did have express power to prosecute, and that they be capable of being included in the same indictment and that the FSA should be able to act as the single prosecutor instead of having to bring in another prosecuting authority.
Andrew Carnes 4-5 Grays Inn Square

 

Articles »