The ruling propels UK law enforcement to increase its investigative powers under POCA, and businesses to enhance their supply chain due diligence.

By Paul A. Davies, Clare Nida, Pamela Reddy, Michael D. Green, James Bee, Annie Birch, and Esha Marwaha

On 27 June 2024, the UK Court of Appeal found that the National Crime Agency’s (NCA’s) decision not to launch an investigation into the importation of cotton products originating from the Xinjiang Uyghur Autonomous

Individuals continue to face risk from prosecutions for economic crime, despite media focus on corporate criminal liability reforms.

By Stuart Alford KC, Mair Williams, and Matthew Unsworth

Four individuals have today appeared at Westminster Magistrates’ Court charged with fraud in connection with the collapse of UK café and bakery chain, Patisserie Valerie.[i] This follows a five-year investigation by the Serious Fraud Office (SFO) — codenamed “Operation Venom” — which was launched after the chain suddenly announced that its financial statements over successive years had been “mis-stated and subject to fraudulent activity”.[ii] Among those charged is former CFO, Christopher Marsh, who was arrested on suspicion of fraud when the scandal first emerged but was released on bail soon after.

While corporate criminal liability continues to dominate headlines ahead of reforms to be introduced by the Economic Crime and Corporate Transparency Bill, the Patisserie Valerie charges serve as a reminder that there remains a risk of prosecution at the individual level. Indeed, this is the third case in which the SFO has charged individuals this year, and the agency is targeting a minimum 60% conviction rate of individual (as well as corporate) defendants between 2022 and 2025.[iii]

The US decision reminds UK companies and their officers to identify and report red flags about misconduct in the workplace.

By Nell Perks, Nathan H. Seltzer, and Georgie Blears

Certain shareholders of McDonald’s Corporation (the Company) sued David Fairhurst, the Company’s former executive vice president and global chief people officer, on behalf of the Company for allegedly breaching his duty of oversight “by allowing a corporate culture to develop that condoned sexual harassment and misconduct” and for “consciously ignoring related red flags”.

In the recent ruling in the matter of In Re McDonalds Corporation Stockholder Derivative Litigation, the Delaware Court of Chancery denied Fairhurst’s motion to dismiss the lawsuit. The court held that corporate officers, like directors, owe shareholders a fiduciary duty of oversight to report upward to more senior officers or to the board credible information that a company may be violating the law, and to not consciously ignore red flags. (Read this Latham Client Alert for more on the decision.)

The letters ask senior management to prioritise implementing the Duty.

By David Berman, Nicola Higgs, Rob Moulton, Becky Critchley, Ella McGinn, Jaime O’Connell, and Dianne Bell

On 3 February 2023, the FCA published Dear CEO/Director letters underscoring the immediate (i.e., during the implementation period up until 31 July 2023) and longer-term expectations, priorities, and demands under the Consumer Duty. For further information, see Latham’s recent blog on the FCA’s multi-firm review summarising areas of improvement for firms’ implementation plans.

The FCA has reviewed firms’ progress to embed the Duty into their businesses, providing good and poor practice examples for firms to improve and direct their implementation work.

By Nicola Higgs, Becky Critchley, Jaime O’Connell, and Dianne Bell

The Consumer Duty (Duty) rules (as set out under the FCA’s Policy Paper (PS22/9) and guidance document FG22/5) come into force at the end of July 2023. On 25 January 2023, the FCA published feedback on firms’ current implementation progress via its Multi-firm review: Consumer Duty Implementation Plans. While the FCA notes a number of positives, the overall impression is that firms need to do more and do it quickly.

A new Latham & Watkins guide examines the recent increase in whistleblowing and poses self-assessment questions against which firms can benchmark themselves.

By David Berman, Andrea Monks, Nell Perks, Nathan H. Seltzer, Becky Critchley, and Charlie Bowden

Many sectors, including financial services, have encountered a discernible increase in whistleblows in recent times — a trend that shows no signs of abating. Indeed, some whistleblowers have seen fit to publicise their concerns in the press and/or