Serious and Complex Fraud: A New Perspective
| Author | George Staple |
| DOI | http://doi.org/10.1111/j.1468-2230.1993.tb00951.x |
| Date | 01 March 1993 |
| Published date | 01 March 1993 |
THE
MODERN
LAW REVIEW
Volume
56
March
1993 No.
2
Serious
and
Complex
Fraud:
A
New Perspective
George
Staple
*
Introduction
There is a well-known story about the notorious fraudster of the First World War,
Horatio Bottomley. He was eventually convicted and sentenced to a term of imprison-
ment. He was visited in gaol by a well-intentioned Peer, who had known him in
his palmy days. At the time of the visit, Bottomley was stitching mail bags. The
visitor said to him, ‘Ah Bottomley,
sewing,
I
see.’
‘No,
reaping,’
came the reply.
It is often said that in the fertile field of serious fraud we experience far too much
sowing, and not enough reaping. But in recent years Parliament has made valiant
efforts to redress the balance. In
1986
the Financial Services Act reached the statute
book. It introduced a new system of regulation to cope with the post ‘Big Bang’
structure of the City.’ A principal purpose of the Act was to prevent fraud. The
following year a new Criminal Justice Act was passed. The Act set up the Serious
Fraud Office, the purpose of which was to improve the investigation and prosecution
of serious and complex fraud. However, there is still widespread concern about
whether sufficient is being done to investigate and prosecute those responsible for
fraud.
A
The Nature
of
Fraud
When
I
arrived at the Serious Fraud Office
I
very quickly became aware of the
presence of the Treasury. Departments are required to forecast expenditure further
and further ahead, and this caused me
to
consider what might be the future pattern
of fraud, and the resulting level of expenditure for the SFO.
There is some evidence to suggest that fraud, at any rate company fraud, like
the economy, is cyclical. In boom conditions, when share prices are high, people
use their company’s paper to buy assets, usually by taking over other companies.
They try to enhance the price of their own shares, or depress the price of the target
company’s shares,
so
that fewer of the acquiring company’s shares have to be found
to provide the purchase consideration.
*Director of the Serious Fraud Office.
This article is a revised version of the Shimizu Lecture delivered at the London School of Economics on
12
November 1992.
1
See Gower, ‘Big Bang and City Regulation’ (1988)
51
MLR
1.
0
The Modern Law Review Limited 1993 (MLR
56:2,
March). Published by Blackwell
Publishers,
108
Cowley Road, Oxford
OX4
1JF and 238 Main Street, Cambridge,
MA 02142, USA.
127
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