FT Adviser quotes Rhys Novak on what advisers need to know about the UK's failure to prevent fraud offence
min readThe “failure to prevent fraud” offence came into effect last week, and while many financial advice firms may not automatically think they will be in scope, there are a number of knock-on consequences.
Where most people may tend to think of fraud as large-scale embezzlement, this act is targeting more everyday occurrences, such as falsifying documents, overstating profits or saying an investment is sustainable when it is not.
Rhys Novak, Dispute Resolution Partner, shares his observations with FT Adviser:
Historically, businesses might have policies [based on] preventing fraud happening to the business. This is different, because this is fraud by and on behalf of the company for its business.
"Until you’ve worked out the risks that you face, how can you understand the measures that you need?
"Sometimes we get approached by a law firm, who say, ‘Can you send me your standard procedure?’ As much as I’d like to do that you have to say, ‘There’s no standard. Have you done a risk assessment?’
Read the full piece in FT Adviser here.
