The former assistant commissioner of the Metropolitan Police was appointed as the director of the Serious Fraud Office (SFO) one year ago today. So how has Nick Ephgrave first year gone at the anti-fraud agency?
Before he stepped foot into his office, lawyers were telling City A.M., that he has a lot of work ahead of him on rebuilding the SFO’s reputation after a slew of failures over the years.
He took the leadership position over from Lisa Osofsky – the director that oversaw a number of these errors.
One of Osofsky errors included her having a meeting with a representative of Unaoil, who sought to influence the outcome of the investigation it was under. The incident contributed to three convictions from the bribery case being overturned.
Before he joined, the agency did a light bit of cleaning by closing down its long-running corruption investigations into Rio Tinto and Eurasian Natural Resources Corporation (ENRC). The ENRC investigation led to a mammoth civil lawsuit against the agency, which is still ongoing.
Over six weeks into Ephgrave’s new role, he launched his first investigation into allegations of fraud surrounding the collapse of law firm Axiom Ince. This was well documented as he brought the Financial Times along to one of the several raids the agency conducted.
So what do City lawyers think of his first year in power? Patrick Rappo, partner at Reed Smith stated that “although it’s fast becoming a national pastime to criticise the SFO, it would be dangerously naïve to assume that the office is struggling or shouldn’t be feared.”
While Neill Blundell, partner at White & Case pointed out that “the SFO has had a difficult few years and Nick Ephgrave’s first 12 months has clearly steadied the ship.”
With Ephgrave background in law enforcement, Rappo views this as what “makes him a decidedly different beast to his predecessors.”
Back in February, Ephgrave outlined his vision for the SFO in his first speech which included him promising “swifter action and more dawn raids”.
To date, the agency has launched five investigations under Ephgrave.
SFO’s ongoing battle is still with disclosure
It was revealed in April by a leading barrister conducting an independent review into disclosure, he found that an average case at the SFO has around 5 million documents. It was noted in the report that the largest case on the SFO’s system has 48 million documents (6.5TB or 6,500GB).
“If printed, the average volume of material in an SFO case would stack considerably higher than the Shard,” wrote Jonathan Fisher KC.
While a report by the HM Crown Prosecution Service Inspectorate in the same month found that the agency had made progress in reforming its disclosure regime, but funding is crucial to fixing the problems.
Blundell noted that the “difficulties (and criticisms) do however remain and the recent issues exposed with its IT review platforms only highlight potentially serious deficiencies in its past performance.”
Ephgrave speaks the language of change and of optimism, of a faster, bolder and stronger agency
Though disclosure is an obvious headache for the SFO in the immediate term – and one that the office is working to address – it will inevitably be solved with the right technology,” Rappo added.
2024-2029 strategy
Ephgrave revealed the agency’s strategy for 2024 to 2029 in April, where he was vocal on exploring incentives for whistleblowers.
As Neil Donovan, partner at Ashurst explained that the director called for whistleblowers to be financially incentivised, which “has gathered momentum as a strategic goal over the course of this year”.
He noted that “it remains to be seen whether the financial incentivisation of whistleblowers is capable of adoption in the UK, but the SFO under Nick Ephgrave is clearly in favour of a move towards the approach of its US counterparts.”
Donovan suggested that two of the four targeted outcomes the strategy mirrored recommendations from the HMCPSI report.
He noted that the “strategy omits a definitive target to reduce the average and median length of investigations, which was an objective in the previous strategy published under Osofsky.”
“This is, perhaps, an acknowledgement of the SFO’s struggle to manage cases in a way that achieves quicker outcomes,” he explained.
Investment in resources and the adoption of new technologies remains the key factor for the SFO.
Rappo noted that “criticism of the SFO won’t disappear overnight,” however he added that “those who mock the newly empowered office could be in for a rude awakening”.
While Blundell suggested that “it is early days for the Ephgrave regime, but the positive rhetoric and enthusiasm of Nick himself will surely bring a buoyancy to the SFO and give the much needed boost to morale.”
“We will need to see if the changes Nick so wants, can come to fruition and whether the SFO will not just be all talk but finally able to show it can walk the fraud walk and get results,” he added.