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England and Wales Court of Appeal (Criminal Division) Decisions


You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Rollins, R. v [2009] EWCA Crim 1941 (09 October 2009)
URL: http://www.bailii.org/ew/cases/EWCA/Crim/2009/1941.html
Cite as: [2010] Bus LR 734, [2010] 1 Cr App R 14, [2010] 1 All ER 1183, [2010] Lloyd's Rep FC 16, [2009] EWCA Crim 1941, [2010] Crim LR 772, [2010] 1 Cr App Rep 14

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Neutral Citation Number: [2009] EWCA Crim 1941
Case No: 2009/2583/C5 & 2009/3372/C5

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM SOUTHWARK CROWN COURT
(HHJ Wadsworth QC and HHJ Goymer)

Royal Courts of Justice
Strand, London, WC2A 2LL
09/10/2009

B e f o r e :

LORD JUSTICE RICHARDS
MR JUSTICE IRWIN
and
HIS HONOUR JUDGE BAKER QC

____________________

Between:
Regina
Respondent
- and -

Neil Rollins
Appellant

And between:




Regina
Respondent
- and -

Michael McInerney
Appellant

____________________

Charles Miskin QC and Robert Rode (instructed by Clarion Solicitors) for the Appellant Rollins
David Perry QC and Samuel Grodzinski (instructed by the Solicitor to the Financial Services Authority) for the Respondent
Neil Hawes (instructed by Irwin Mitchell LLP) for the Appellant McInerney
David Perry QC and Simon Gerrish (instructed by the Solicitor to the Financial Services Authority) for the Respondent
Hearing date : 21 July 2009

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Lord Justice Richards :

  1. The central issue in these appeals is whether The Financial Services Authority ("the FSA") has power to prosecute offences of money laundering contrary to sections 327 and 328 of the Proceeds of Crime Act 2002 ("POCA 2002"). The appellants contend that the FSA's powers to prosecute criminal offences are limited to the offences referred to in sections 401 and 402 of the Financial Services and Markets Act 2000 ("FSMA 2000"), which do not include offences under POCA 2002. The FSA contends that its powers are not limited in that way and, in particular, that as a body corporate with legal personality it has the common law power to bring prosecutions in respect of other offences.
  2. Neil Rollins faces charges for (i) offences of insider dealing contrary to section 52 of the Criminal Justice Act 1993, and (ii) offences of money laundering contrary to sections 327 and 328 of POCA 2002. The former offences relate to the sale of shares in a company by which he was employed; the latter relate to the transfer of part of the proceeds of sale from his bank account to a bank account in his father's name. He does not challenge the FSA's power to prosecute the insider dealing offences. His challenge to the power to prosecute the money laundering offences under POCA 2002 was brought originally by way of proceedings for judicial review, but it was subsequently agreed that the appropriate procedure was a preparatory hearing in the Crown Court under Part III of the Criminal Procedure and Investigations Act 1996, and the judicial review application was withdrawn. At a preparatory hearing under the 1996 Act, His Honour Judge Wadsworth QC, sitting in the Crown Court at Southwark, ruled that the FSA had the power it claimed. Mr Rollins appeals against that ruling with leave of the judge pursuant to section 35 of the 1996 Act.
  3. Michael McInerney faces charges (i) alleging that he and his company committed offences contrary to section 23 of FSMA 2000 arising out of an involvement with various illegal "boiler room" activities, in particular by processing the proceeds of sales of shares, and (ii) in respect of offences contrary to sections 327 and 328 of POCA 2002 for laundering that money, disguising its origin and destination. He does not challenge the FSA's power to prosecute the section 23 offences. His challenge to the power to prosecute the money laundering offences under POCA 2002 was brought originally by way of proceedings for judicial review, but those proceedings have not been progressed. The issue is now raised by way of an application to discharge a restraint order made against him under section 41 of POCA 2002: the grounds on which discharge is sought include the contention that the FSA lacked the power to prosecute the money laundering offences. His Honour Judge Goymer, sitting in the Crown Court at Southwark, ruled against discharge. An application is now made for leave to appeal against that ruling.
  4. The FSA

  5. The FSA is a company limited by guarantee. It was incorporated in June 1985 under the name of The Securities and Investment Board Ltd ("the SIB"). Its name was changed to that of the FSA in October 1997.
  6. Various functions of the Secretary of State under the Financial Services Act 1986 were transferred to the SIB (as it then was) pursuant to sections 114 and 201 of that Act by The Financial Services Act 1986 (Delegation) Order 1987 and subsequent delegation orders. They included the functions of the Secretary of State in relation to the institution of proceedings in respect of certain offences under the Act. Similarly, various statutory functions of the Bank of England were transferred to the FSA (as it had by then become) by section 21 of the Bank of England Act 1998.
  7. The April 2000 version of the Memorandum and Articles of Association of the FSA, reflecting various amendments since the original incorporation of the company as the SIB, expressed the company's objects and powers in broad terms. For example, by clause 3(A)(i)(a) of the Memorandum its objects included "to promote and maintain high standards of integrity and fair dealing in the carrying on of investment business, deposit-taking business, insurance business, business carried on by building societies, friendly societies, industrial and provident societies and credit unions and the provision of other financial services". More specifically, but without prejudice to the generality of paragraph (i), by clause 3(A)(ii)(a) its objects included "to do any thing with a view to or arising in connection with the transfer to the Company of all or any of the functions to which section 114 of the Financial Services Act 1986 applies or the vesting in the Company of powers or functions pursuant to any other law or any regulation from time to time having effect in any part of the United Kingdom". As to powers, clause 3(B) provided as follows:
  8. "With respect to the foregoing objects the powers of the Company shall include (but not be limited to) powers to do any of the following where the directors of the Company consider the same to be incidental or conducive to the objects of the Company:
    (vi) to institute legal or arbitration proceedings or itself to establish and operate procedures for the settlement of disputes."
  9. In February 2001, following the enactment of FSMA 2000, clause 3 was amended and simplified. In its amended form it reads:
  10. "The Authority's objects are:
    (A) to carry out any functions conferred on the Authority by or under any provision of any legislation, as amended from time to time, and to carry out such other functions or exercise such powers as, from time to time, may be carried out or exercisable by the Authority.
    (B) to carry out any other function or exercise any other power as may, in the Authority's view, assist or enable it to carry out the functions and powers referred to above or which the Authority considers incidental, desirable or expedient."

    The relevant provisions of the FSMA 2000

  11. Section 1 of the FSMA 2000, as amended, reads:
  12. "1. The Financial Services Authority
    (1) The body corporate known as the Financial Services Authority ('the Authority') is to have the functions conferred on it by or under this Act.
    (2) The Authority must comply with the requirements as to its constitution set out in Schedule 1.
    (3) Schedule 1 also makes provision about the status of the Authority and the exercise of certain of its functions.
    (4) Section 249 of the Banking Act 2009 provides for references to functions of the Authority (whether generally or under this Act) to include references to functions conferred on the Authority by that Act (subject to any order under that section)."
  13. The matters set out in Schedule 1, to which reference is made in section 1(2) and (3), include a requirement that the constitution of the FSA must continue to provide for the Authority to have a chairman and a governing body (paragraph 2); a requirement for the FSA to secure that the majority of the members of the governing body are non-executive members (paragraph 3), who are to form a non-executive committee with specified functions (paragraph 4); requirements to make arrangements for monitoring and enforcement (paragraph 6) and for the investigation of complaints (paragraph 7); recording and reporting requirements (paragraphs 9-12); a provision that the FSA is not to be regarded as acting on behalf of the Crown (paragraph 13); provisions concerning penalties and fees (paragraphs 16-18); and an exemption from liability in damages for things done or omitted to be done in the discharge or purported discharge of the Authority's functions (paragraph 19).
  14. Section 2 relates to the FSA's general duties. Its general functions are defined in subsection (4) as its function of making rules under the Act, its function of preparing and issuing codes under the Act, its functions in relation to the giving of general guidance, and its function of determining the general policy and principles by reference to which it performs its particular functions. Subsection (1) provides that in discharging those functions it must, so far as reasonably possibly, act in a way which is compatible with the regulatory objectives and which it considers most appropriate for the purpose of meeting those objectives. The regulatory objectives are defined in subsection (2) as including market confidence and the reduction of financial crime. The market confidence objective is defined in section 3 as maintaining confidence in the financial system operating in the United Kingdom. The reduction of financial crime objective is defined in section 6(1) as reducing the extent to which it is possible for a business carried on by a regulated person, or in contravention of the general prohibition, to be used for a purpose connected with financial crime. Financial crime is itself defined by section 6(3) as including any offence involving fraud or dishonesty, misconduct in (or misuse of information relating to) a financial market, or handling the proceeds of crime.
  15. Section 168 concerns the appointment of persons to carry out investigations in particular cases. The circumstances that may trigger the relevant powers relate to suspected offences under FSMA 2000 and certain other specified legislative provisions, corresponding in substance to those mentioned in sections 401 and 402 in relation to the institution of criminal proceedings (see below). They do not include offences under POCA 2002.
  16. Sections 401 and 402 relate to the institution of criminal proceedings:
  17. "401. Proceedings for offences
    (1) In this section 'offence' means an offence under this Act or subordinate legislation made under this Act.
    (2) Proceedings for an offence may be instituted in England and Wales only
    (a) by the Authority or the Secretary of State; or
    (b) by or with the consent of the Director of Public Prosecutions.
    (3) Proceedings for an offence may be instituted in Northern Ireland only
    (a) by the Authority or the Secretary of State; or
    (b) by or with the consent of the Director of Public Prosecutions for Northern Ireland.
    (4) Except in Scotland, proceedings for an offence under section 203 may also be instituted by the Office of Fair Trading.
    (5) In exercising its power to institute proceedings for an offence, the Authority must comply with any conditions or restrictions imposed in writing by the Treasury .
    402. Power of the Authority to institute proceedings for certain other offences
    (1) Except in Scotland, the Authority may institute proceedings for an offence under
    (a) Part V of the Criminal Justice Act 1993 (insider dealing);
    (b) prescribed regulations relating to money laundering; or
    (c) Schedule 7 to the Counter-Terrorism Act 2008 (terrorist financing or money laundering).
    (2) In exercising its power to institute proceedings for any such offence, the Authority must comply with any conditions or restrictions imposed in writing by the Treasury ."
  18. As to the reference in section 402(1)(a) to Part V of the Criminal Justice Act 1993, the position within Part V of that Act is that section 52 creates the offence of insider dealing, whilst section 61(2) provides that proceedings for offences under Part V "shall not be instituted except by or with the consent of (a) the Secretary of State or (b) the Director of Public Prosecutions". The Divisional Court held in R (Uberoi) v City of Westminster Magistrates' Court and Others [2008] EWHC 3191 (Admin) that the effect of section 402(1)(a) is to empower the FSA to bring proceedings for an offence under Part V without obtaining such consent. Sir Anthony May PQBD expressed his conclusion in this way at para [29]:
  19. "In my judgment the structure and content of the 2000 Act amply demonstrate that it must have been the Parliamentary intention that the FSA would be able to institute proceedings under Part V of the 1993 Act without consent from outside. In the light of section 61(2) of the 1993 Act, and not overlooking paragraph 4 of Schedule 1 to the 1987 Act and the absence of such provision in the 2000 Act, section 402(1) is not tightly drawn. But the implication is to my mind abundantly plain. It is achieved by reading the words 'may institute' in section 402(1) as having the same meaning and effect as the same words in the passive voice 'may be instituted by' in section 401(2), so that the FSA may institute proceedings under section 402(1) on their own initiative and without the antecedent need to obtain the consent of the Secretary of State or the DPP. If a narrow argument of literal construction might not lead to that result, in my judgment the narrow argument is overwhelmed by the obvious general Parliamentary intention and the specific intention to be derived from those two sections."
  20. The reference in section 402(1)(b) to "prescribed regulations relating to money laundering" is to regulations made to give effect to EC Council Directives in the field. The current regulations are The Money Laundering Regulations 2007. Regulation 1(2) of those regulations prescribes them for the purposes of sections 168(4)(b) and 402(1)(b) of FSMA 2000. Regulation 45 creates various offences. Regulation 46 lists the persons (not including the FSA) who may institute proceedings for an offence under regulation 45. The effect of section 402(1)(b) is to add the FSA to that list. (It should, however, be noted that at the time when FSMA 2000 was enacted the regulations in force were the Money Laundering Regulations 1993, which created various offences but did not specify who could prosecute them. The 1993 Regulations were then prescribed for the purposes of sections 168(4)(b) and 402(1)(b) of FSMA 2000 by The Financial Services and Markets Act 2000 (Regulations Relating to Money Laundering) Regulations 2001.)
  21. The reference in section 402(1)(c) to Schedule 7 to the Counter-Terrorism Act 2008 was inserted by that Act, specifically by paragraph 33(4) of schedule 7. Paragraph 30 of schedule 7 defines various offences arising under the schedule. Paragraph 33(1) itself includes the FSA within the list of persons who may institute proceedings for such an offence.
  22. The power of the FSA to prosecute offences under POCA 2002

  23. The central issue, as we have indicated, is whether the FSA has power to prosecute offences under sections 327 and 328 of POCA 2002.
  24. The case advanced by Mr Charles Miskin QC for Rollins, and by Mr Neil Hawes for McInerney, is that the FSA's powers are defined and limited by FSMA 2000 and that, since that Act does not confer the power to prosecute offences under POCA 2002, the FSA does not have such a power.
  25. Mr Miskin's written skeleton argument went so far as to refer to the FSA as "a statutory corporation". That is plainly incorrect and Mr Miskin did not pursue the point in that form in his oral submissions. FSMA 2000 does not create the FSA or turn it into a statutory corporation but assumes its existence as a body corporate and, by section 1, provides that it is to have the functions conferred on it by or under the Act, lays down requirements as to its constitution with which it must comply, and makes certain other provisions concerning its status and the exercise of its functions.
  26. It was submitted that FSMA 2000 nonetheless lays down a complete code within which the FSA must operate, precluding the bringing of any prosecution for offences outside the regulatory functions conferred on the FSA by that Act. Mr Miskin pointed out that Rollins did not work in the financial services industry, was not conducting authorised investment business, and was brought within the remit of FSMA 2000 only to the extent of the reference in section 402 to the insider dealing provisions of Part V of the Criminal Justice Act 1993. He submitted that FSMA 2000 was not to be read as allowing the FSA to prosecute such a person for a money laundering offence falling outside the scope of the FSA's regulatory functions under the Act.
  27. We do not accept those submissions. Section 1(1) of FSMA 2000 does not state that the FSA's functions are to be limited to those conferred on it by or under the Act. The section simply states that the FSA is to have those functions. Nor do the other provisions of section 1 or schedule 1 restrict the powers of the FSA in such a way as to deprive it, or to prevent it from performing, functions other than those conferred on it by or under the Act. Section 1(4), which refers in the context of the Banking Act 2009 to functions of the FSA "whether generally or under this Act", plainly contemplates that the FSA has wider functions. In any event, if the legislative intention had been to cut down the powers of the FSA so as to limit it to the functions conferred by or under FSMA 2000, clear and express language would have had to be used for the purpose; and in the absence of such language the statute cannot in our view be interpreted as having that effect.
  28. Sections 2 and 6, upon which counsel for the appellants also relied, do not assist the appellants' case. The provisions in question relate only to the FSA's general functions as defined in section 2(4) and have no direct bearing on the matters here in issue.
  29. Nor do sections 401 and 402 preclude an independent power on the part of the FSA to institute proceedings for offences other than those expressly referred to in those sections.
  30. We accept that section 401 is apt to confer an express power on the persons named in it to institute proceedings for offences under the Act or subordinate legislation made under the Act; and the court in R (Uberoi) v City of Westminster Magistrates' Court (cited above) held in terms, at paragraph [22], that the FSA was empowered by subsection (2) to institute such proceedings. In our judgment, however, the essential purpose of the section is not to confer power but to limit the persons who may institute proceedings for offences under the Act or subordinate legislation made under the Act. Further, the section tells one nothing about the extent of prosecutorial power otherwise enjoyed by the persons named. Thus, it cannot seriously be argued that without the express provision of subsection (2) the Secretary of State or the DPP would lack the power to institute prosecutions in England and Wales for offences under the Act, or that the subsection affects their power to institute prosecutions for other offences. It is equally untenable to suggest that the provision in subsection (2)(b) that proceedings may be brought "with the consent of the Director of Public Prosecutions" is anything other than a filter to prevent persons who are otherwise empowered to do so from prosecuting offences under the Act without the consent of the DPP. The evident purpose of the subsection is to limit those who may prosecute offences under the Act to the persons named and to other persons who obtain the consent of the DPP. The same points can be made about the corresponding provision in subsection (3) concerning Northern Ireland. The reference in subsection (4) to the Office of Fair Trading is again a reference to a specialist prosecutor who would plainly have the power to institute prosecutions without the need for express provision and whose power to prosecute other offences cannot be affected by the subsection. Taking the section as a whole, its clear effect in relation to the FSA is to empower it to institute proceedings for offences under the Act (or subordinate legislation made under the Act) without obtaining the consent of the DPP, but it provides no basis for an inference that in the absence of express provision the FSA would lack the power to prosecute those offences or that the FSA lacks the power to prosecute other offences.
  31. Section 402 has a similar effect in relation to offences under the legislation specified in it. It empowers the FSA to prosecute those offences without obtaining the consent of the DPP. That is how subsection (1)(a) was interpreted by the court in R (Uberoi) v City of Westminster Magistrates' Court (paragraph [12] above). We agree with that decision and consider that the provisions of subsection (1)(b) and (1)(c) are to be interpreted in the same way. It is true, as regards subsection (1)(b), that whilst the consent of the DPP is required under the regulations prescribed in 2007, it was not required under the regulations originally prescribed, so that a provision empowering the FSA to prosecute without the consent of the DPP was not originally needed, though such a provision now serves a real purpose (see paragraph [13] above). It is also true, as regards subsection (1)(c), that schedule 7 of the Counter-Terrorism Act 2008 already includes the FSA in the list of those who may prosecute offences under the schedule, so that a separate provision empowering the FSA to prosecute without the consent of the DPP is not strictly needed at all. The position is therefore untidy, but it does not cause us to doubt that section 402 is to be interpreted in the way we have indicated. Again, therefore, the section does not warrant an inference that in the absence of express provision the FSA would lack the power to prosecute the offences referred to in it or that the FSA lacks the power to prosecute other offences.
  32. For those reasons we reject the appellants' contention that sections 401 and 402 together create a complete regime of offences that the FSA has the power to prosecute.
  33. The FSA claims to be exercising the right of private prosecution in prosecuting offences under POCA 2002. That right was expressly preserved by section 6 of the Prosecution of Offences Act 1985, which provides:
  34. "6.(1) Subject to subsection (2) below, nothing in this Part shall preclude any person from instituting any criminal proceedings or conducting any criminal proceedings to which the Director's duty to take over the conduct of proceedings does not apply.
    (2) Where criminal proceedings are instituted in circumstances in which the Director is not under a duty to take over their conduct, he may nevertheless do so at any stage."
  35. The continuing survival of the right, to the extent provided for by that section, is vouchsafed by the decision of the House of Lords in Jones v Whalley [2007] 1 AC 63; and, as was observed by Mitting J in R (Ewing) v Davis [2007] EWHC 1730 (Admin), at paragraph [23], "if the right of private prosecution is to be taken away or subjected to limitation, it is for Parliament to enact and not for the courts by decision to achieve." The importance of the right is illustrated by the reliance placed on it by Lord Woolf CJ in R (Hunt) v Criminal Cases Review Commission [2001] QB 1108, at paragraph [20], in support of the common law power of the Inland Revenue Commissioners to bring prosecutions:
  36. "Great importance has always been attached to the ability of an ordinary member of the public to prosecute in respect of breaches of the criminal law. If an ordinary member of the public can bring proceedings for breaches of the criminal law, it would be surprising if the Inland Revenue were not in a similar position."

    See also R (Securiplan PLC and Others) v Security Industry Authority [2008] EWHC 1762 (Admin), at paragraph [33], where Blake J observed:

    "It is hardly remarkable that Parliament should not have given the regulator overt powers of prosecution when a prosecution can be brought by the ordinary citizen in the public as well as the private interest (see R (Ewing) v Davis ). In my judgment, the powers available to the private citizen also undermine the contention that in the modern era only the CPS or regulators that are independent of the investigative processes can institute proceedings ."
  37. That the right of private prosecution can be exercised by a corporate body was confirmed by the Divisional Court in R (Gladstone plc) v Manchester City Magistrates' Court [2005] 1 WLR 1987. The correctness of the decision in that case was not challenged by counsel for the appellants. Moreover, one of the points made in Jones v Whalley (see in particular per Lord Mance at paragraph [38]) was that prosecutions may be initiated by private bodies such as high street stores, and by charities such as the NSPCC and RSPCA, as well as by private individuals.
  38. In R (Uberoi) v City of Westminster Magistrates' Court (cited above) it was submitted on behalf of the FSA, as in the present case, that the FSA is entitled as a private person to institute criminal proceedings without the need to seek that power from statute. Sir Anthony May's reaction was that "[t]there is a large degree of unreality in suggesting that the FSA should be viewed simply as a private person" (paragraph [17]); and we have already dealt with his finding that sections 401 and 402 of FSMA 2000 gave the FSA an express statutory power to prosecute the offences referred to in them without obtaining the consent of the DPP. He did not, however, reject the proposition that it was open to the FSA to bring a private prosecution in the absence of express statutory power. On the contrary, he accepted the substance of counsel's submission that the purpose of section 402 cannot be simply to give the FSA a power to institute proceedings under Part V of the Criminal Justice Act 1993 "which technically it does not need", but must be to place the FSA for the purpose of Part V in the equivalent position of the Secretary of State and the DPP (see paragraph [25] read with his conclusion at paragraph [29]). One cannot, however, take the point too far. The decision does not stand as authority one way or the other on the question whether the FSA has the power to bring a private prosecution.
  39. For our part, we can see no reason why the general right of private prosecution should not be enjoyed by the FSA. The right is not excluded by FSMA 2000 or any other statutory provision to which our attention has been drawn, and the powers conferred on the FSA by its Memorandum of Association are easily wide enough to cover the institution of criminal proceedings within the scope of its objects. The sufficiency of the powers conferred by the Memorandum was true even under the April 2000 version (paragraph [6] above), but it is put beyond any possible doubt by the width of clause 3(A) and (B) of the February 2001 amendment (paragraph [7] above).
  40. Counsel for the appellants made much of the point that for many years the FSA did not claim the power to prosecute offences other than those for which express statutory power was conferred on it. For example, in a consultation paper issued in April 2000 on "Money Laundering: the FSA's new role", the FSA placed emphasis on its intention to co-operate with other criminal law enforcement bodies and did not suggest that it could exercise prosecutorial powers of the kind now claimed; and in early versions of its Enforcement Manual it referred only to its power to prosecute under FSMA 2000. By contrast, in its July 2007 "Decision Procedure and Penalties Manual and the Enforcement Guide" the FSA stated for the first time that, apart from its powers under sections 401 and 402 of FSMA 2000, it "may also prosecute criminal offences for which it is not the statutory prosecutor, but where the offences form part of the same criminality as the offences it is prosecuting under the Act" (paragraph 12.1). Such material is in our view of no assistance. Whether the FSA has the power to prosecute depends on objective legal analysis, not on the FSA's subjective understanding of the position at any given time.
  41. Counsel also submitted that the existence of a power of private prosecution would produce a mismatch with the FSA's investigatory powers: the powers of investigation conferred on it by section 168 of FSMA 2000 relate to the same offences as those in relation to which it enjoys prosecutorial powers under sections 401 and 402, and the absence of powers of investigation in relation to other offences was submitted to be an indicator that the FSA also lacked the power to prosecute such other offences. We are not persuaded by that line of argument. The right of private prosecution does not depend upon the enjoyment of corresponding powers of investigation, and it will frequently be the case that a private prosecutor lacks relevant statutory powers of investigation. The fact that the FSA does not claim to enjoy statutory powers of investigation in relation to the offences under POCA 2002 therefore tells one nothing about its power to prosecute those offences. If offences under POCA 2002 come to its attention in the course of investigations carried out in the exercise of the powers that it does enjoy under section 168 of FSMA 2000, then in our judgment it can prosecute those offences notwithstanding that they fall outside the scope of the statutory powers of investigation.
  42. Accordingly, the conclusion we reach is that the FSA does have the power to prosecute offences beyond those referred to in sections 401 and 402 of FSMA 2000 and, in particular, it has the power to prosecute the appellants for offences contrary to sections 327 and 328 of POCA 2002. That conclusion also makes practical good sense. Where offences form part of the same criminality as offences that the FSA has undoubted power to prosecute under FSMA 2000, it is sensible that they should be capable of being included in the same indictment and that the FSA should be able to act as the single prosecutor instead of having to bring in another prosecuting authority. Moreover, on the appellants' case the FSA would not even be able to prosecute an offence of conspiracy to commit offences under FSMA 2000, since the offence of conspiracy, whether under section 1 of the Criminal Law Act 1977 or at common law, falls outside the powers of prosecution expressly conferred by sections 401 and 402. That would be a highly unsatisfactory position and cannot have been the legislative intention.
  43. The Rollins appeal

  44. Our conclusion in relation to the prosecutorial powers of the FSA is dispositive of the appeal in the case of Rollins. We are satisfied that the judge's ruling in his case was correct and that the appeal should be dismissed.
  45. The McInerney appeal

  46. Our conclusion in relation to the prosecutorial powers of the FSA also disposes of the primary ground of appeal in the case of McInerney, namely that the FSA had no power to prosecute money laundering offences under POCA 2002.
  47. There are further grounds of appeal alleging a failure by the FSA to make full and frank disclosure in support of the application for a restraint order. In so far as those grounds contend that there was a failure to disclose the absence of a power on the part of the FSA to prosecute the offences under POCA 2002, they fail for the reasons already given. But it is contended in addition that the FSA ought to have disclosed that it was acting as a "non-statutory" or private prosecutor in relation to those offences.
  48. The contention is advanced on the premise that the FSA applied for the restraint order pursuant to sections 40 and 41 of POCA 2002 as the prosecutor of money laundering offences under sections 327 and 328 of that Act. That premise appears to be factually mistaken: the witness statement of Mr Sean Hendy filed in support of the application for the restraint order strongly suggests that the application was made in relation to offences under FSMA 2000 itself. We need not, however, decide that issue. Even on the assumption that the FSA was applying inter alia as prosecutor of the money laundering offences under POCA 2002, we are satisfied that its failure to disclose that it was acting as a private prosecutor rather than statutory prosecutor in respect of those offences was not a material non-disclosure and could not justify the discharge of the restraint order.
  49. The correct approach to an issue of non-disclosure in relation to an application for a restraint order is explained in Director of Serious Fraud Office v A [2007] EWCA Crim 1927 at paragraph [18], applying Jennings v Crown Prosecution Service [2005] EWCA Civ 746:
  50. "Plainly, in order to provide any ground for discharging the initial order which has been obtained without notice to the suspect, any non-disclosure must be material, that is to say it must be of something which would have affected the judge's decision on the application. If there has been a material failure of disclosure, that may justify discharging the order, but it need not do so. The proper approach is to consider whether the public interest does or does not call for the order to stand, now that the true position is known, and taking into account the previous failure of disclosure. Whether the non-disclosure was deliberate or accidental will be a material factor, although not necessarily determinative ."
  51. Mr Hawes, in his written skeleton argument, suggested various ways in which the judge's decision to make the restraint order might have been affected by the knowledge that the FSA was acting as private prosecutor in respect of the offences under POCA 2002. We are wholly unpersuaded that such information would have had any effect on the judge's approach to the application. We are also satisfied that the public interest calls for the order now to stand irrespective of the FSA's failure to disclose its status as a private prosecutor in relation to offences under POCA 2002. The matters raised under FSMA 2000 were sufficient to justify the making of the order and militate strongly against its discharge: we note in particular that McInerney has been charged with 36 offences contrary to sections 19 and 23 of that Act, which involve a direct benefit in excess of 360,000 and, if proved, will result in his falling within the criminal lifestyle provisions of section 75 of POCA 2002.
  52. Since the main issues raised by McInerney were common to those raised by Rollins, who had already been granted leave to appeal, we grant McInerney leave to appeal against the judge's refusal to discharge the restraint order. For the reasons given, however, we are satisfied that his substantive appeal should be dismissed.
  53. Reporting restriction

  54. The final matter with which we need to deal concerns reporting of this judgment. Since, in the case of Rollins, this is an appeal from a decision at a preparatory hearing, the position under section 37 of the Criminal Procedure and Investigations Act 1996 is that a reporting restriction applies until the conclusion of the trial unless we order otherwise pursuant to section 37(4). Mr Miskin argued that if there was to be any publication of the judgment prior to trial, it should be on an anonymised basis (with the use of the initials "R" and "M"), but did not identify any specific prejudice to which full reporting could give rise. In the case of McInerney no such statutory restriction applies and Mr Hawes, whilst maintaining a neutral stance, acknowledged that the appellant's name had already been published in the judicial review proceedings.
  55. In our opinion, the subject-matter of the appeal and the matters considered in the judgment are such that there is no need to maintain or impose any reporting restriction. A full and fair report of the judgment could not possibly prejudice the fairness of the trial of either appellant. We have therefore referred to the appellants by name; and pursuant to section 37(4) of the 1996 Act, we order that section 37(1) shall not apply in relation to the reporting of the judgment.


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URL: http://www.bailii.org/ew/cases/EWCA/Crim/2009/1941.html