Standard Bank deferred prosecution agreement (UK, 2015)
- Date approved
- 30 November 2015 1
- Judge
- Sir Brian Leveson, President of the Queen's Bench Division 1
- UK amounts
- Penalty US$16.8 million, disgorgement US$8.4 million, compensation US$6 million plus US$1,046,196.58 interest, SFO costs £330,000 1
- SEC
- US$4.2 million civil penalty under Securities Act section 17(a)(2) 4
- Admission
- SEC: bank admitted the facts underlying the SEC charges 4. UK: DPA based on a statement of facts 1
- Status
- DPA ended 30 November 2018 after full compliance, per the SFO 3
What happened
The judgment states that the Government of Tanzania sought to raise US$600 million through a sovereign note private placement 1. Stanbic Bank Tanzania, a sister company of Standard Bank, brought in a local company, EGMA Limited, whose fee was 1% of the funds raised 1. EGMA's US$6 million fee was paid through Stanbic and most of it was withdrawn in cash soon after 1. The court said there was no evidence that EGMA provided services 1.
The judgment records that two of EGMA's three directors were a Tanzania Revenue Authority commissioner and a former chief executive of the country's capital markets regulator 1. It states that no knowing participation in bribery was alleged against the bank or its staff 1.
The legal basis
The bank faced one count under section 7 of the Bribery Act 2010 1. Section 7 makes a commercial organisation guilty of an offence if a person associated with it bribes another to obtain or retain business for it 6. It is a defence to prove that the organisation "had in place adequate procedures" to prevent such conduct 6.
DPAs are governed by Schedule 17 of the Crime and Courts Act 2013 5. The court must first declare that a DPA "is likely to be in the interests of justice" and that its proposed terms "are fair, reasonable and proportionate" 5. Final approval must be given, with reasons, in open court 5. When the DPA expires, the prosecutor tells the court it no longer wants the case to continue 5.
The terms
Sir Brian Leveson approved the DPA on 30 November 2015 1. The SFO says the indictment was "immediately suspended on 30 November 2015" under the agreement 2.
Self-report and the SEC case
The judgment states that Stanbic staff flagged the cash withdrawals and the bank's head office was alerted 1. The authorities were informed within three weeks of the first internal report 1. The court referred to the "promptness of the self-report" 1. It said the bank recognised "its serious failings" and cooperated fully 1.
The SEC announced its settlement the same day 4. Standard Bank agreed to pay a US$4.2 million civil penalty for violating Section 17(a)(2) of the Securities Act of 1933 4. The SEC said the bank settled by "admitting the facts underlying the SEC's charges" 4. The SEC said the bank was not an "issuer", so it lacked FCPA jurisdiction 4.
Outcome
The SFO says the compensation payment to the Tanzanian government "took place in May 2016" 2. On 30 November 2018 the SFO announced "the end of the UK's first Deferred Prosecution Agreement" 3. It confirmed that Standard Bank plc, now ICBC Standard Bank plc, "had fully complied with its terms" 3.
Common questions
Was Standard Bank convicted?
No. Its indictment was suspended under the DPA 2, and the SFO said in 2018 that the bank fully complied and the DPA ended 3.
How much did Standard Bank pay under the DPA?
A US$16.8 million penalty, US$8.4 million disgorgement, US$6 million compensation plus US$1,046,196.58 interest, and £330,000 SFO costs 1.
Did Standard Bank admit anything?
In the SEC case it admitted the facts underlying the charges 4. The UK DPA rests on an agreed statement of facts 1.
Why was it the first UK DPA?
DPAs became available under Schedule 17 of the Crime and Courts Act 2013 5, and the SFO called this the UK's first 3.
Rules and fees change. Check the official site linked above before you apply or pay. Spotted an error? Email hello@settlementsexplained.org with the official link.
Sources
- Courts and Tribunals Judiciary: Serious Fraud Office v Standard Bank plc, approved judgment (30 November 2015)
- Serious Fraud Office: Standard Bank PLC case page (Welsh-language site, last modified 17 May 2021)
- Serious Fraud Office: UK's first Deferred Prosecution Agreement, between the SFO and Standard Bank, successfully ends (30 November 2018)
- U.S. Securities and Exchange Commission: Standard Bank to Pay $4.2 Million to Settle SEC Charges, 2015-268 (30 November 2015)
- legislation.gov.uk: Crime and Courts Act 2013, Schedule 17
- legislation.gov.uk: Bribery Act 2010, section 7
Related
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How DPAs work in England and Wales under Schedule 17 of the Crime and Courts Act 2013: who can enter one, court approval, terms, breach and admissions.
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How U.S. deferred prosecution agreements and non-prosecution agreements work for companies, the Justice Manual factors, and what the company admits.
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