Supreme Court Confirms FSA's Power To Prosecute Money Laundering Offences

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In October last year we reported on the Court of Appeal decision in R v Rollins, which concerned a prosecution by the FSA for insider dealing and money laundering (see our LawNow). In that case, the Court of Appeal confirmed the FSA's power to prosecute offences beyond those expressly set out in the Financial Services & Markets Act 2000 ( "FSMA"), including money-laundering offences under the Proceeds of Crime Act 2002 ("POCA"). That decision was subsequently appealed and on 28 July 2010, the Supreme Court unanimously dismissed the appeal. Issue The appellant, Mr Rollins, argued that the FSA's powers to prosecute criminal offences were limited to those referred to in sections 401 and 402 FSMA (which did not include offences under POCA). Accordingly, the question was whether the effect of sections 401 and 402 FSMA was to confine the FSA's prosecution powers to the offences listed within those sections. The Supreme Court's judgment The Supreme Court noted that any person has the right generally to bring a private prosecution, subject to any statutory restrictions. This right extends to a corporate, so long as it is permitted to do so by its corporate instruments, such as its memorandum and articles of association. Therefore, as a corporate body, the FSA enjoys the right to bring private prosecutions, subject to any statutory restrictions and provided it was permitted to do so under its memorandum and articles. The FSA's objects include carrying out any functions conferred on it by statute. FSMA sets out the FSA's functions and objectives, which includes acting in a way that it considers most appropriate to meet its regulatory objectives, including the reduction of financial crime. In this regard, it has powers of prosecution. POCA did not contain any statutory restrictions on who may bring a prosecution for an offence it created. Therefore, absent sections 401 and 402 FSMA, the FSA would have power to prosecute money laundering offences under POCA, like anyone else. The Supreme Court considered those sections of FSMA and agreed with the Court of Appeal that the purpose of section 401(2) was not to limit the offences that FSA was permitted to prosecute, but to limit the power to prosecute offences under FSMA to the FSA (and those other persons listed). The Court roundly rejected the appellant's argument that FSMA exhaustively defined the offences that the FSA could prosecute. The...