Regina v Rollins; [2009] EWCA Crim 1941; [2009] WLR (D) 294

CRIME — Proceeds of crime — Money laundering — Whether Financial Services Authority having power to prosecute criminal offences other than under Financial Services and Markets Act 2000 — Financial Services and Markets Act 2000, ss 401, 402 — Proceeds of Crime Act 2002, ss 327, 328

Regina v Rollins

Regina v McInerney

[2009] EWCA Crim 1941; [2009] WLR (D) 294

CA: Richards LJ, Irwin J, Judge Baker QC: 9 October 2009

The Financial Services Authority had the power to prosecute offences beyond those referred to in ss 401 and 402 of the Financial Services and Markets Act 2000 and, in particular, it had the power to prosecute for offences contrary to ss 327 and 328 of the Proceeds of Crime Act 2002.

The Court of Appeal (Criminal Division) so held when dismissing an appeal by Neil Rollins under s 35 of the Criminal Procedure and Investigations Act 1996 against a ruling made by Judge Wadsworth QC at a preparatory hearing on 7 May 2009 in the Crown Court at Southwark that the Financial Services Authority could properly prosecute offences under the Proceeds of Crime Act 2002 of money laundering and was not restricted to the prosecution of offences specifically permitted in the Financial Services and Markets Act 2000 and in particular sections 401 an 402 of the 2000 Act; and when granting the application for leave to appeal but dismissing the appeal of Michael Joseph McInerney against the refusal of Judge Goymer on 23 June 2009 in the Crown Court at Southwark to discharge a restraint order made against him under s 41 of the 2002 Act. Neil Rollins faced charges of (i) insider dealing, contrary to s 52 of the Criminal Justice Act 1993 and (ii) money laundering, contrary to ss 327 and 328 of the 2002 Act. Michael McInerney faced charges that (i) he and his company had committed offences contrary to s 23 of the 2000 Act arising out of an involvement with various “boiler room” activities, in particular by processing the proceeds of sales of shares, and (ii) in respect of offences contrary to ss 327 and 328 of the 2002 Act

The Financial Services and Markets Act 2000 provides: “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 [Financial Service Authority] or the Secretary of State; or (b) by or with the consent of the Director of Public Prosecutions. … 402. Power of the authority to institute proceedings for certain other offences (1) … 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 …”

RICHARDS LJ said, in the reserved judgment of the court, that the central issue was whether the Financial Services Authority (“ FSA”) had power to prosecute offences under ss 327 and 328 of the Proceeds of Crime Act 2002. The case advanced on behalf of both defendants was that the FSA’s powers were defined and limited by the Financial Services and Markets Act 2000; that since that Act did not confer the power to prosecute offences under the 2002 Act the FSA did not have such a power; and that the 2000 Act laid down a complete code within which the FSA had to operate, precluding the bringing of any prosecution for offences outside the regulatory functions conferred on the FSA by that Act. Their Lordships did not accept those submissions. Section 1(1) of the 2000 Act did not state that the FSA’s functions were to be limited to those conferred on it by or under the Act. The section simply stated that the FSA was to have those functions. Nor did ss 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. The essential purpose of s 401 was not to confer power but to limit the persons who might institute proceedings for offences under the Act or subordinate legislation made under the Act. Thus, it could not seriously be argued that without the express provision of subs (2) the Secretary of State or the Director of Public Prosecutions (’DPP’) would lack the power to institute prosecutions in England and Wales for offences under the Act, or that the subsection affected their power to institute prosecutions for other offences. Taking the section as a whole, its clear effect in relation to the FSA was 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 provided 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 lacked the power to prosecute other offences. Section 402 had a similar effect in relation to offences under the legislation specified in it. It empowered the FSA to prosecute those offences without obtaining the consent of the DPP. That was how subs (1)(a) was interpreted by the Divisional Court in R (Uberoi) v City of Westminster Magistrates’ Court [2009] 1 WLR 1905. Their Lordships agreed with that decision and considered that the provisions of subs (1)(b) and (1)(c) were to be interpreted in the same way. Again, therefore, the section did 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 lacked the power to prosecute other offences. The FSA claimed to be exercising the right of private prosecution in prosecuting offences under the 2002 Act and their Lordships could see no reason why the general right of private prosecution should not be enjoyed by the FSA. Accordingly, the FSA had the power to prosecute offences beyond those referred to in ss 401 and 402 of the 2000 Act and, in particularly, it had the power to prosecute the appellants for offences contrary to ss 327 and 328 of the 2002 Act.

Appearances: Charles Miskin QC and Robert Rode (Clarion Solicitors) for Rollins; David Perry QC and Samuel Grodzinski (Solicitor to the Financial Services Authority) for the prosecutor. Neil Hawes (Irwin Mitchell LLP) for McInerney; David Perry QC and Simon Gerrish (Solicitor to the Financial Services Authority) for the prosecutor.

Reported by: Clare Barsby, barrister.