The new Corporate Failure to Prevent Fraud Offence

The new Corporate Failure to Prevent Fraud Offence

From 1 September 2025, companies will automatically commit a criminal offence if one of its Associated Persons commits a fraud, intending to benefit (directly or indirectly) the company or its clients.

Likely sources of relevant frauds include:

-sales and advertising
-annual reports and market disclosures
-representations and warranties in contracts
-accounts and financial statements
-investor and banking representations

The offence is relevant to any company which itself, or where a member of its supply chain, has any 2 of the following:

-over 250 employees
-over 36 million in turnover
-more than 18 million in assets

The Defence:

Reasonable fraud prevention procedures.

The Government’s guidance on what qualifies as “reasonable” requires a bespoke risk assessment and a likely uplift to compliance programmes.

Jeremy Gordon has extensive experience advising on compliance programmes and on the interpretation of governmental, regulatory and prosecutorial guidances. If you would like to discuss the offence, or which aspects of the guidance best assists your firm’s reasonable fraud prevention procedures, please reach out to your usual contact.