The power of the FSA to prosecute
ROLLINS, R. v. [2009] EWCA CRIM. 1941CASE 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
Categories: 5th Edition, Chapter 17, Current topics, Updates