Our fraud and asset recovery experts bring you the latest news and legal decisions affecting the fraud industry.
Crime of failure to prevent economic crime
According to the Justice Minister, the Ministry of Justice has decided against introducing a new criminal offence of failing to prevent an economic crime.
He stressed that the principle of corporate criminal liability already exists in the UK and that it was unnecessary to introduce this new offence. He highlighted that there had been no prosecutions made under the failure to prevent a bribery offence and so could see such a proposed offence having a similar impact.
TalkTalk falls victim to high-profile cyber attack
Telecommunications company TalkTalk has become the latest company to fall victim to cyber-crime. It was feared that the attack involved the personal details of up to 4 million customers being seized, although the figure is now understood to be significantly lower.
The collated personal data was used to contact TalkTalk customers, impersonating employees of the company, in a scheme to encourage customers to give out further information that would allow access bank accounts. A number of customers have complained that their credit cards and bank accounts have been targeted.
This is the third time that TalkTalk has been targeted this year. In February, its customers were warned about hackers who had stolen thousands of account numbers and names. In August, the company revealed that its mobile sales site had been targeted and that personal data had been accessed by cyber criminals.
The police have arrested four people in connection with the latest attack.
The full effect of this latest attack is still to be realized; the company's share price dropped by 10% in the first few hours and the media coverage will impact its reputation.
Cyber-crime is being called one of the biggest threats facing companies in the technology age. It is important for businesses to understand their vulnerability to this type of attack. In particular it is crucial that each business has processes in place both to protect itself from this type of attack and to minimise the damage if it were to take place.
It is estimated by Google and McAfee that there are 2,000 cyber-attacks every day around the world; costing the global economy approximately £300 billion per year.
SFO drops charges against Olympus
The UK Serious Fraud Office (SFO) has recently announced that it is dropping charges against Japanese camera maker Olympus Corporation (Olympus) after charging the Japanese company and its British subsidiary, Gyrus Group Ltd (Gyrus), with making false and misleading financial statements four years ago.
This scandal emerged in 2011 when its former CEO whistleblew over an alleged US$1.7 billion accounting fraud, whereby Olympus had used acquisitions to mask losses. Olympus was ordered to pay £4.4 million in fines by a Japanese court at the start of 2013; following which Olympus' board resigned and Olympus along with three former executives were sentenced after pleading guilty to offences relating to a cover up.
The SFO charged Gyrus and Olympus in September 2013 with offences of making a statement to an auditor which was misleading, false or deceptive. The Court of Appeal, however, held in February 2015 that companies cannot be held criminally responsible for misleading their own auditors under English law. The decision is due to be publically released shortly after initially being a private decision.
After consideration of this decision the Serious Fraud Office decided to drop its case against both companies. It also announced that it could not have prosecuted any individuals involved because Japan does not extradite its nationals.