FCA's first criminal case of destroying evidence unsuccessful - but don't count the FCA down and out...
min readIn something of a setback for the FCA, its prosecution of Konstantin Vishnyak for destroying documents relevant to an FCA investigation has been unsuccessful. Mr Vishnyak was found not guilty of the offence under section 177(3)(a) of the Financial Services and Markets Act 2000.
That section criminalises a person who knows or suspects that an investigation is being or is likely to be conducted and then falsifies, conceals, destroys or otherwise disposes of a document which he or she knows or suspects is or would be relevant to such an investigation, unless he or she shows that he had no intention of concealing facts disclosed by the documents from the investigator.
It was alleged that Mr Vishnyak, who was at the time under investigation by the FCA for suspected insider dealing offences, deleted the WhatsApp application on his phone after it became clear he was required to provide it to investigators. Mr Vishnyak, a former banker at Russia's VTB Bank, testified that he deleted the app in a panic to hide his chats with prominent Russian politicians and businesspeople during the summer of 2018. The court was told that a Russian politician suspected of killing the country's former security officer Alexander Litvinenko were among them.
Although this is the first time that the FCA has exercised these powers, and it was unsuccessful, no negative inferences can be drawn as to the likely direction of the FCA on prosecutions for interfering with an investigation are concerned. If anything, in recent years the Serious Fraud Office (SFO) has successfully pursued a number of individuals for similar offences and the FCA is likely to continue to go the criminal route where the relevant case is in furtherance of its mission. Although unsuccessful, the Vishnyak case does send out a message that, where an investigation is ongoing and it has evidence of deletion, it will pursue those responsible for the deletion. Indeed, the FCA's (albeit very short) press release responding to the acquittal, makes clear that the FCA will not be dissuaded in appropriate cases.
The FCA is disappointed with the outcome, but respects the verdict. We will take action whenever evidence we need is tampered with or destroyed.
