UK fraud buster tells firms no more cosy chats

* SFO says no presumption in favour of civil settlements

* Lawyers say firms may think twice before blowing whistle

By Huw Jones

LONDON, Oct 9 (Reuters) - Britain's Serious Fraud Office(SFO) said blowing the whistle on crime won't guarantee freedomfrom prosecution as the fraud-buster seeks to restore itscredibility after embarrassing setbacks.

The SFO's new head David Green took up the reins in May andis refocusing the agency to pursue a more aggressive andtargeted crime-fighting strategy.

Once dubbed the "Seriously Flawed Office" by detractors, itsought to reinforce its mission in new guidelines on Tuesdaythat become effective immediately.

"The SFO's primary role is to investigate and prosecute," itsaid. "The revised policies make it clear that there will be nopresumption in favour of civil settlements in anycircumstances."

Lawyers see a shift in how the SFO will treat companies thatvoluntarily own up to possible crime, ending the assumption theywould get off with civil penalties and won't end up behind bars.

"The new SFO policy means that self-reporting by businessesof potential incidents of bribery and corruption, which used belike a cosy fireside chat, has been replaced by a much astricter regime," said Richard Burger, a regulatory partner atReynolds Porter Chamberlain.

"From now on it will be an interview - without coffee."

Businesses that decide to meet with the SFO to report anincident need to be clear that they are meeting a prosecutor,Burger added.

Jonathan Hitchin, a litigation partner at law firm Allen &Overy, said the shift may lead to some companies which discoversuspected illegality to question whether there is a benefit inself-reporting.

The SFO wants to rebuild its reputation after judges in onerecent case slammed the agency for "sheer incompetence" forobtaining search warrants unlawfully.

But some critics argue the SFO will continue to have anuphill battle to build its credibility until it gets more fundsto hire expertise in what are often lengthy and complex cases.

Green had said in June in his first speech that he wouldfocus on "top drawer fraud" and improve how the cases arehandled. "Is the SFO here to stay? Yes, it is here to stay. Doesit have to prove itself? Yes it does," he said.

(Editing by David Holmes)

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