CII R01 Financial Crime Prevention 4 — Questions and Answers
Question 1: What is the Bribery Act 2010?
- An act that legalised small gifts to clients
- UK legislation creating offences of bribing, being bribed, and the corporate offence of failing to prevent bribery (Correct answer)
- An act that only applies to government officials
- An act that was replaced by the Financial Services Act 2012
Correct answer: UK legislation creating offences of bribing, being bribed, and the corporate offence of failing to prevent bribery
The Bribery Act 2010 created offences of bribing another person, being bribed, bribing a foreign public official, and the corporate offence of failing to prevent bribery. It is one of the strictest anti-bribery laws in the world.
Question 2: What defence is available to a commercial organisation charged with failing to prevent bribery?
- That the bribery was committed by a junior employee
- That it had adequate procedures in place to prevent bribery (Correct answer)
- That the bribery occurred overseas
- That the amount involved was small
Correct answer: That it had adequate procedures in place to prevent bribery
Under section 7 of the Bribery Act 2010, a commercial organisation has a defence if it can show that it had adequate procedures in place designed to prevent persons associated with it from committing bribery.
Question 3: What is 'fraud by false representation' under the Fraud Act 2006?
- Claiming to be a different gender
- Dishonestly making a false representation intending to make a gain or cause a loss (Correct answer)
- Failing to file accurate tax returns
- Misrepresenting a product's country of origin
Correct answer: Dishonestly making a false representation intending to make a gain or cause a loss
Under section 2 of the Fraud Act 2006, fraud by false representation occurs when a person dishonestly makes a representation that is untrue or misleading, with the intention of making a gain for themselves or causing loss to another.
Question 4: What is 'market abuse' under the UK Market Abuse Regulation?
- Charging excessive fees for financial products
- Behaviour including insider dealing, unlawful disclosure of inside information, and market manipulation (Correct answer)
- Refusing to serve certain customer groups
- Trading outside of normal market hours
Correct answer: Behaviour including insider dealing, unlawful disclosure of inside information, and market manipulation
UK MAR defines market abuse as including insider dealing, unlawful disclosure of inside information, and market manipulation. These behaviours undermine market integrity and investor confidence.
Question 5: What is 'insider dealing' under the Criminal Justice Act 1993?
- Trading shares in your employer's company
- Dealing in securities while in possession of inside information that would affect their price (Correct answer)
- Trading within the firm's own account
- Buying shares recommended by an analyst
Correct answer: Dealing in securities while in possession of inside information that would affect their price
Insider dealing is a criminal offence involving dealing in price-affected securities while in possession of inside information, or encouraging another to deal, or disclosing inside information otherwise than in the proper performance of employment.
Question 6: What are the penalties for money laundering offences under POCA?
- A fine only
- Up to 14 years' imprisonment and/or an unlimited fine (Correct answer)
- Community service only
- Up to 2 years' imprisonment
Correct answer: Up to 14 years' imprisonment and/or an unlimited fine
Money laundering offences under POCA carry a maximum penalty of 14 years' imprisonment and/or an unlimited fine, reflecting the seriousness with which these offences are treated.
CII R01 Financial Crime Prevention 4
What is the Bribery Act 2010?