DPP Latest News: the Serious Fraud Office, ETFs and the Bribery Act

This entry was posted on Saturday, July 30th, 2011 at 6:38 pm

The Serious Fraud Office (SFO) said it had identified Exchange Traded Funds (ETFs) as an ?area of interest and potential concern?, although the funds are not yet part of any investigation, the Telegraph reports.

Critics of ETFs argue that the ease of investing in the funds make them a potential pitfall for novice investors, who often do not know what is behind the fund they are investing in, leaving them vulnerable to serious fraud. A spokesman for the SFO said: ?ETFs in general have some of the characteristics which send alarm signals.?

The Lawyer?s John Smart believes that many companies are not sufficiently prepared for the greater regulatory scrutiny imposed by the Bribery Act, which was passed on July 1. Smart argues that, although companies have years to become compliant; HR, training and recruitment policies ?remain woefully underdeveloped? and ill-equipped for dealing with corporate fraud.

According to a recent survey of large UK companies by Ernst & Young, one in six employees said they would offer personal gifts or services to win business, which is at odds with the new bribery legislation.

To help cut the risk of corporate fraud, Smart advises businesses to appoint an ethics or compliance officer, undertake a risk assessment, provide employees with comprehensive training, deliver a message of ?zero tolerance? and clearly establish what can be classed as ?appropriate? in terms of gifts and corporate entertainment.