Accounting fraud: liability issues for directors

Kevin Robinson, dispute resolution partner at law firm Morgan Lewis, examines liability issues for directors when accounting fraud takes place, particularly important in light of government plans to make it a criminal offence for senior executives who fail to prevent financial crimes

On 5 September, the Attorney General announced that the government would consult on plans to create a new criminal offence of a corporation failing to prevent economic crimes, such as money laundering, false accounting and fraud. What possibly gives this announcement a little extra frisson is the fact that four days later the Serious Fraud Office (SFO) announced charges against three Tesco executives of false accounting and fraud.

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