The new director of the Serious Fraud Office is pushing to pay whistleblowers, a reversal from the agency’s past resistance to the tactic, as he tries to revive the fortunes of the beleaguered prosecutor.
The move to reward informants for information is among Nick Ephgrave’s plans to reform how the SFO investigates major fraud and economic crime cases after years of setbacks and threats to its future.
In an interview with the Financial Times, Ephgrave said he would like the SFO to start using more investigative techniques borrowed from policing, such as covert intelligence, to help the agency move faster.
“There are other ways to investigate that perhaps the SFO’s not used much in the past,” Ephgrave, 57, said in an interview at the agency’s headquarters near London’s Trafalgar Square.
“Stuff we can borrow from policing — covert capabilities . . . thinking more in terms of crimes in action, how can we intercede now and actually catch the person in the act,” he added. “I’d like us to be quicker.”
The measures are among a package of reforms Ephgrave is pushing for, along with a potential financial reward for whistleblowers, a common practice in US law enforcement but less prevalent in the UK.
Last year, the US Securities and Exchange Commission awarded $279mn to a whistleblower, its largest ever payout.
“We should pay whistleblowers,” Ephgrave said in a speech on Tuesday night at the Royal United Services Institute think-tank in Whitehall.
More than 700 UK whistleblowers have worked with US law enforcement since 2012, he added.
Ephgrave’s remarks are a reversal of the thinking of previous SFO directors. David Green, who was head of the agency from 2012 to 2018, had argued moral responsibility should encourage people to come forward and said paying for such information “just isn’t British”.
The UK Financial Conduct Authority also ruled payments out a decade ago, taking the view they would reward people for doing their regulatory duty.
The UK government announced a review of whistleblower laws last year. The findings are due in March, according to a spokesperson for the UK Department for Business and Trade. Legislation would be required to allow the SFO to pay whistleblowers.
Ephgrave’s comments come ahead of a visit to the US next week where he will seek to “cement relations” with his US law enforcement counterparts, he told the FT.
The SFO’s relationship with the US Department of Justice is important to the agencies’ transatlantic investigations, but they have at times clashed, most notoriously over the Libor and Unaoil investigations.
Ephgrave’s trip is part of a broader attempt to reset a narrative about a struggling SFO. He has opened three new investigations since joining, as well as arresting and charging a number of suspects.
Internally too, he has sought a new approach, abandoning the director’s traditional corner office to work alongside colleagues on a row of desks.
“I just think it sets the tone,” Ephgrave said. “I expect my leaders to be in amongst it, I expect them to be with their teams, talking to their teams, not some high and mighty presence that occasionally appears and then disappears again behind a door with a bunch of people preventing access.”
After more than 30 years in policing at the highest level, and as the runner up in 2022 for the job as head of London’s Metropolitan Police, Ephgrave is no stranger to being in an organisation under pressure.
Despite some bright spots, including a 2022 conviction of mining company Glencore, the SFO has for years generated more headlines over its failures than successes.
Long-running investigations into miners Eurasian Natural Resources Corporation and Rio Tinto were shut down without charges under former director, Lisa Osofsky, last year.
But Ephgrave’s status as the first non-lawyer to run the SFO, and a relative unknown among the white-collar defence community, could be an advantage, said Alison Saunders, former director of public prosecutions.
“He can look at it with fresh eyes and do something different,” she said.
Born in Surrey, Ephgrave’s father was a concrete salesman and his mother was a part-time carer. He studied physics at university and worked as a medical physicist before moving into policing to “stop nasty people doing nasty things to nice people”.
In his early years of policing in the 1990s, when there were frequent threats from the Irish Republican Army, Ephgrave was nearly killed on the beat when he was standing 100 yards away from the Baltic Exchange bombing.
His most memorable case was the murder of schoolboy Damilola Taylor in Peckham. Ephgrave was heavily involved in the retrial and subsequent convictions of Taylor’s killers. He still speaks to Taylor’s father.
He retired from policing in April before returning to public service with the SFO job in September.
“It’s got to be commendable that after more than three decades in public life he had the appetite to come again into public service at the SFO,” said Max Hill, a former DPP who met Ephgrave as junior counsel on the Taylor case. “I’d suggest that’s pretty unusual . . . it’s a mark of the man.”
Not everyone is convinced. One defence lawyer said there was a lot “crash bang wallop” in Ephgrave’s public statements since taking office, but questioned whether this would translate into successful prosecutions given his lack of direct prosecutorial experience.
Ephgrave is also up against resource constraints. The SFO’s budget was just under £80mn in 2022-23 and the agency is in the process of trying to recruit about a third more permanent staff to bring numbers to about 600.
Still, new legislation such as the Economic Crime Act has gifted him more powers, such as the ability to prosecute companies for failing to prevent fraud by employees and subsidiaries.
When he is not hunting criminals, Ephgrave likes to tour Europe with his wife on a motorbike, play the euphonium, or sail in his dinghy.
Bikes and music will have to wait though, as Ephgrave tries to get the SFO back on an even footing before his five-year tenure is up.
“I want to leave the organisation really confident about itself,” he told the FT. “Really, really pushing the boundaries of what’s possible given its size and scale.”
