‘We’re coming after them’ – SFO keen to pursue forthcoming Failure to Prevent Fraud Offence

Ahead of the new Failure to Prevent Fraud offence coming into force in September this year, Nick Ephgrave, the Director of the Serious Fraud Office (“SFO”), has made clear that he intends to hit the ground running on enforcement as soon as the offence is available.

On 3 April 2025, SFO Director Nick Ephgrave unveiled a series of bold new strategies aimed at addressing the decline the agency is experiencing in self-reporting by companies, including utilising the new Failure to Prevent Fraud offence available under the Economic Crime and Corporate Transparency Act (“ECCTA”). He also revealed plans to enhance covert intelligence-gathering, focus on asset confiscation, and build expertise in cryptocurrency fraud.

For corporates with an eye on their ethical business practices, or who are keen to ensure their business stays ahead of legislative and enforcement change, the comments should bring into sharp focus the need to ensure their organisation is ready ahead of September for the changes to come.

Anna McIntyre, former SFO Case Controller and Senior Associate, and Kelis Fencott, Trainee Solicitor, explore the latest insights into SFO thinking.

Focus on Failure to Prevent Fraud (s.199 ECCTA)

A key focus for the SFO over the next 12 months will be on the UK’s forthcoming Failure to Prevent Fraud offence, which is set to come into effect in September. Ephgrave stated that his agency will work to engage with companies to explain ‘how to avoid getting into trouble’, but will ‘show no mercy’ once the new offence is in effect.

Come September, if they haven’t sorted themselves out, we’re coming after them. That’s the message I’ll be delivering. I’m very, very keen to prosecute someone for that offence. We can’t sit with the statute books gathering dust, someone needs to feel the bite.

Nick Ephgrave, SFO

We have previously written about the new offence, the Home Office guidance for companies published in November, and what it means for your organisation here. However, it has long been clear that the Failure to Prevent Fraud offence will have significant implications for UK organisations, in much the same way as the introduction of the s.7 Failure to Prevent Bribery offence did under the Bribery Act 2010; by ensuring that the SFO and other authorities have a quick and easy route to prosecute the corporate itself for its failures to prevent economic crime.

The availability of the Failure to Prevent Bribery offence facilitated some of the largest fines levied by the SFO in recent years, including the Amec Foster Wheeler DPA in 2021 (£103 million), which this article’s author negotiated on behalf of the SFO. In the absence of clear evidence that Foster Wheeler had ‘adequate procedures’ in place to prevent bribery, it was a relatively simple exercise to include a s.7 offence on the indictment, which, even with significant discounts and recognition for the company’s co-operation, still resulted in eye-watering fines.

Now, following a long period of lobbying by the SFO, the same offence will be available for Failure to Prevent Fraud. This means that, from September, even a junior employee or ‘associated person’, including associated third parties, commit a fraud within the scope of their role, businesses will be held strictly liable should they have failed to put ‘reasonable’ procedures in place to prevent fraud.

Ephgrave’s comments about the SFO showing “no mercy” once the offence is in force signal, unsurprisingly, that the agency will take a zero-tolerance approach to non-compliance, and is keen to use the offence in the same way to reach quicker resolutions in cases involving corporate crime. In our experience, these remarks are not to be taken lightly and will reflect the attitude of the agency moving forward.

Ahead of the Bribery Act 2010, companies were generally aware, proactive, and careful to ensure that they had tightened their compliance controls. The very same actions are required now to ensure anti-fraud procedures are ready to go and in place ahead of September.

Why should we act now?

The timing is generally opportune to undertake a review of your organisation’s compliance measures, as, in addition to the ticking clock on the Failure to Prevent Fraud offence:

• The ‘senior manager’ offence under s.196 ECCTA is already in force, meaning that companies can now be held directly liable for the actions of its senior managers, should they commit one of a suite of economic crimes, including bribery and corruption and fraud.
• The Crime and Policing Bill has been introduced to the House of Commons in the UK. Among other proposed changes, the Bill aims to expand the above senior manager provisions regarding corporate criminal liability, extending liability beyond just economic crimes to include all types of criminal activity. You can read our full article on this here.
• Ephgrave has also announced his intention to invest in ‘covert’ intelligence-gathering methods to gain deeper insights into businesses, bringing his previous experience as Assistant Commissioner of the Metropolitan Police to bear in the agency’s investigations.

Our Business Crime and Investigations team:

We can:

• Conduct a risk assessment, giving you an understanding of your business’ individual risk profile and the risk-proportionate measures it needs to put in place to ensure it is protected.
• Train your staff to ensure they understand their responsibilities and how ECCTA and its new offences will affect them in their day-to-day roles.
• Provide your staff with guidance, including template documents to guide them on ECCTA’s key principles and ensure they can recognise ‘red flags’ for economic crime and feel able to escalate concerns.
• Review your current policies and procedures and ensure they’re up to date and ‘ECCTA-ready’.
• Conduct ongoing monitoring to ensure new changes in the landscape are reflected, and any risks or concerns are dealt with promptly.

To receive further information and regular updates from our team, get in touch today, or sign up for our Business Crime & Investigations Insights here.