The Fraud Files EP10: Application of failure to prevent fraud to group structures

In this last episode of the series, the Corporate Crime and Investigations team considers the application of the Failure to Prevent Fraud offence to complex group structures including in relation to parent companies and their subsidiaries (whether incorporated in the UK or overseas).

Susannah Cogman, Eamon McCarthy-Keen, and Clara Browne examine several important issues in this episode such as: (i) how the offence applies to corporate group structures; (ii) the potential liability of a parent company for the activities of its subsidiaries and their employees, including where the employee is a 'senior manager'; (iii) the application of the offence to global companies; and (iv) conduct across borders. They also provide insight into the steps that businesses should take to prepare for the imminent implementation of the Failure to Prevent Fraud offence at a group and individual subsidiary level.

You can find links to further background reading relevant to the episode below:

1. Summary table regarding parent-subsidiary liability
2. HSF Kramer FTPF Briefing
3. The Economic Crime and Corporate Transparency Act 2023
4. Home Office Guidance
5. UK Finance Guidance