On 11 July 2016 the SFO successfully concluded its second DPA with XYZ Ltd (XYZ), a subsidiary of the US registered corporation ABC Companies LLC (ABC).
In 2012 an internal investigation by lawyers retained by ABC revealed evidence of an eight year period of corruption by XYZ in obtaining contracts worth £6.5 million in gross profit.
XYZ’s offending spanned the introduction of the Bribery Act 2010 so the indictment included pre and post Act charges. Under the financial terms of the DPA gross profits of £6.2 million were to be disgorged, of which £1.9 million were to be contributed by ABC (though ABC had not known of nor knowingly profited from XYZ’s criminality), and a financial penalty of £352,000 was to be paid.
Although the Court concluded that the offending was serious and sustained, it gave a substantial financial discount on account of XYZ’s cooperation with the SFO and the “economic knife-edge” on which it operated. The Court concluded that in the particular circumstances the overall penalty of approximately £6.5 million was fair, reasonable, proportionate and sufficiently marked the offending.
Cooperation was key – within three months of concerns emerging, XYZ’s lawyers had met with the SFO and confirmed there would be a self-report following the conclusion of the internal investigation.
Although the financial terms of the DPA were tied to XYZ’s particular circumstances, it may comfort companies to know that genuine cooperation with the SFO means that the courts are not bound to follow a rigid and harsh sentencing regime.