Richard Sallybanks and Umar Azmeh write for The Law Society Gazette – Is the FCA flexing its muscles as prosecutor?

Richard Sallybanks and Umar Azmeh write for The Law Society Gazette – Is the FCA flexing its muscles as prosecutor?

BCL partner Richard Sallybanks and associate Umar Azmeh’s article Is the FCA flexing its muscles as prosecutor? has been published by The Law Society Gazette.

Here’s an extract from the article:

“Much has been written about the Financial Conduct Authority’s (‘FCA’) recent decision to commence criminal proceedings against National Westminster Bank PLC (‘NatWest’) for offences under the Money Laundering Regulations 2007 (‘MLR’). However, given that the FCA also started two insider dealing prosecutions in February 2021, does this signal an increased willingness on the part of the FCA to flex its muscles as a prosecutor in the criminal courts?

With an annual budget well in excess of half a billion pounds[1], and a wide range of criminal, civil and regulatory powers under a number of Acts of Parliament, the FCA is a core plank of the regulation of the United Kingdom’s financial services sector, regulating nearly 60,000 businesses.[2] The FCA’s Enforcement Division works in conjunction with its Authorisation, Supervision, Strategy and Competition Divisions, along with law enforcement and other regulators, and seeks to “identify and act early when enforcement action is necessary.”[3] However, despite its long-established powers to bring criminal cases, it has in recent years appeared to prefer to take action against misconduct in the areas for which it has responsibility through its civil regulatory regime. Although civil penalties can have a significant impact on a company’s or a person’s financial position, ability to carry out regulated activity and reputation, they do not carry the stigma and consequence of a criminal conviction. Further, so far as individuals are concerned, they do not have the deterrent effect on others of seeing that this type of misconduct is likely to result in imprisonment and significant financial orders whose quantum can far exceed any profits made from the wrongdoing.

On 11 February 2021, the FCA announced that it had charged two individuals – Stuart Bayes and Jonathan Swann – with various offences of insider dealing under the Criminal Justice Act 1993 (‘CJA’). The alleged offending took place in the spring of 2016 and concerned trading in shares in British Polythene Industries PLC ahead of an announcement of its acquisition by RPC Group PLC. The profit from the alleged insider dealing was just under £140,000.[4]

Less than a week later, on 16 February 2021, the FCA announced that it had charged two brothers – Mohammed Zina and Suhail Zina – with  six offences of insider dealing under the CJA in respect of trading in the shares in six companies between July 2016 and December 2017, resulting in profits of approximately £142,000. One of the defendants had been employed at Goldman Sachs International as an analyst in their Conflicts Resolution Group, and the other as a solicitor at Clifford Chance LLP. In addition to the insider dealing charges, the alleged wrongdoing also concerns fraudulently obtained loans totalling £95,000 from a commercial bank that were allegedly used to fund the insider dealing. Charges have been brought under the Fraud Act 2006 alleging fraud by misrepresentation (in that the loans were stated to be for the purposes of home improvements), an example of how the FCA can, and will in appropriate cases, pursue criminal charges beyond those relating to misconduct in the markets it regulates.[5]


This article was published by The Law Society Gazette 10/05/2021. You can read the full version on their website.

A partner in BCL for 20 years, Richard Sallybanks has been involved in numerous UK and international business crime investigations and prosecutions. His core practice is defending senior executives who are suspects in investigations. His SFO experience includes the Airbus, Barclays Qatar, Alstom and Kaupthing Bank investigations as well as successfully defending Tesco’s Commercial Director on charges of an alleged £250m accounting fraud. Many of his cases are cross-border and Richard is experienced in managing and co-ordinating teams of lawyers in multi-jurisdictional investigations. In the financial sector he has acted for bankers, brokers, traders and senior executives in criminal and regulatory investigations, by the FCA and overseas authorities, including in relation to allegations of money laundering, insider dealing and market abuse.

Umar Azmeh is a solicitor at BCL, specialising in business crime, financial crime, and regulatory investigations. He has significant experience of criminal investigations involving money laundering and bribery, and has worked with clients on sanctions, tax, and proceeds of crime issues. He has expertise in commercial litigation, including civil fraud with an international dimension, and particularly where there is a criminal aspect. He has also advised both corporations and individuals on potential liability under the Proceeds of Crime Act 2002, the Fraud Act 2006, and the Bribery Act 2010, which includes drafting relevant policies for corporate clients.

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