Seems they got wind of my posts about the legality of ICOs and disclosure.
Frankly saying, you overestimate your influence. Their asses are covered by legal entities created by a team of lawyers. Even if you are smarter than that team only the company will take the hit.
Hope their lawyers were really, really good:
There are a number of situations in which, where an offence is committed by a company and it is proved to have been committed with the ‘consent or connivance’ of a director, manager or other senior person, that person is also guilty of the offence. Examples of such provisions are to be found in many statutes creating criminal offences, including the Theft Act 1968, the Fraud Act 2006 and, more recently, the Bribery Act 2010. The rationale behind them is to enable the prosecution and punishment not only of the corporate entity but, where sufficiently culpable, those who control it. In other words, they provide a means of holding to account those who are complicit in offences committed by companies.
So, under s14 of the Bribery Act, where an offence under s1 (bribing another person), s2 (receiving bribes) or s6 (bribery of foreign public officials) of the Act is committed by a company and that offence is proved to have been committed with the consent or connivance of a senior officer of the company, the senior officer as well as the company will be guilty of the offence. This provision only applies to the substantive offences under the Bribery Act – there can be no individual director liability in respect of the corporate offence of failing to prevent bribery.
Under this and similar provisions in other statutes, the corporate entity and the senior person who consented or connived are both guilty of the main offence, ie there is no separate offence of ‘consent or connivance’. A relatively recent example is Director of The Serious Fraud Office v Mabey Engineering (Holdings) Ltd [2012], where the engineering group Mabey & Johnson pleaded guilty to breaching UN sanctions by paying kickbacks to Saddam Hussein’s regime and three senior executives were subsequently convicted of the same offences on the basis of their consent or connivance. There is in fact no requirement that the company itself be prosecuted, provided the offence can be proved against it. Any prosecution of the relevant senior person would have to establish, to the satisfaction of a jury, that the company had committed the offence in question.
Negligence
There are also a number of statutes creating criminal offences that extend the ‘consents or connives’ provision to include an offence committed by the body corporate that is attributable to any neglect on the part of the individual director or senior person. An example is s37 of the Health and Safety at Work Act (HSWA) 1974, which applies to all the criminal offences created by the Act (the vast majority of which, since January 2009, carry a prison sentence of up to two years). This broader basis for imposing liability is not, however, limited to health and safety matters. Similar provisions affect offences under statutes as wide-ranging as the Trade Descriptions Act 1968, the Companies Act 2006 and the Private Security Industry Act 2001, many of which carry significant custodial sentences.
The potential for criminal liability in these circumstances is more akin to the position in the United States where, in relation to certain offences concerned with public welfare (such as those relating to environmental protection and food safety), the ‘Responsible Corporate Officer’ (RCO) doctrine imposes criminal liability on officers who, because of their position in the corporation, had the responsibility and authority to prevent or correct infringements of the law.2 Crucially, corporate officers can be prosecuted under the RCO doctrine even if they were unaware of the particular conduct within the corporation, provided they:
knew that such conduct was unlawful;
were ‘in a responsible relation to public danger’3 (ie had authority to exercise control over the specific activities that caused the unlawful conduct); and
failed to prevent the conduct, for example by failing to implement suitable systems and controls.4
Penalties under the RCO doctrine can be significant. In 2007, for example, Purdue Frederick Company was accused of misbranding the painkiller OxyContin. Its CEO, general counsel, and medical director were also charged under the RCO doctrine and pleaded guilty to charges of misbranding a drug. They were each sentenced to extensive community service, fined $5,000 and excluded from participating in federal healthcare programmes for 12 years.5 They were also collectively ordered to pay approximately $34.5m in disgorgement.
So, under s14 of the Bribery Act, where an offence under s1 (bribing another person), s2 (receiving bribes) or s6 (bribery of foreign public officials) of the Act is committed by a company and that offence is proved to have been committed with the consent or connivance of a senior officer of the company, the senior officer as well as the company will be guilty of the offence. This provision only applies to the substantive offences under the Bribery Act – there can be no individual director liability in respect of the corporate offence of failing to prevent bribery.
Under this and similar provisions in other statutes, the corporate entity and the senior person who consented or connived are both guilty of the main offence, ie there is no separate offence of ‘consent or connivance’. A relatively recent example is Director of The Serious Fraud Office v Mabey Engineering (Holdings) Ltd [2012], where the engineering group Mabey & Johnson pleaded guilty to breaching UN sanctions by paying kickbacks to Saddam Hussein’s regime and three senior executives were subsequently convicted of the same offences on the basis of their consent or connivance. There is in fact no requirement that the company itself be prosecuted, provided the offence can be proved against it. Any prosecution of the relevant senior person would have to establish, to the satisfaction of a jury, that the company had committed the offence in question.
Negligence
There are also a number of statutes creating criminal offences that extend the ‘consents or connives’ provision to include an offence committed by the body corporate that is attributable to any neglect on the part of the individual director or senior person. An example is s37 of the Health and Safety at Work Act (HSWA) 1974, which applies to all the criminal offences created by the Act (the vast majority of which, since January 2009, carry a prison sentence of up to two years). This broader basis for imposing liability is not, however, limited to health and safety matters. Similar provisions affect offences under statutes as wide-ranging as the Trade Descriptions Act 1968, the Companies Act 2006 and the Private Security Industry Act 2001, many of which carry significant custodial sentences.
The potential for criminal liability in these circumstances is more akin to the position in the United States where, in relation to certain offences concerned with public welfare (such as those relating to environmental protection and food safety), the ‘Responsible Corporate Officer’ (RCO) doctrine imposes criminal liability on officers who, because of their position in the corporation, had the responsibility and authority to prevent or correct infringements of the law.2 Crucially, corporate officers can be prosecuted under the RCO doctrine even if they were unaware of the particular conduct within the corporation, provided they:
knew that such conduct was unlawful;
were ‘in a responsible relation to public danger’3 (ie had authority to exercise control over the specific activities that caused the unlawful conduct); and
failed to prevent the conduct, for example by failing to implement suitable systems and controls.4
Penalties under the RCO doctrine can be significant. In 2007, for example, Purdue Frederick Company was accused of misbranding the painkiller OxyContin. Its CEO, general counsel, and medical director were also charged under the RCO doctrine and pleaded guilty to charges of misbranding a drug. They were each sentenced to extensive community service, fined $5,000 and excluded from participating in federal healthcare programmes for 12 years.5 They were also collectively ordered to pay approximately $34.5m in disgorgement.
