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 freedom from prosecution as the fraud-buster seeks to restore its credibility after embarrassing setbacks.

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

Once dubbed the "Seriously Flawed Office" by detractors, it sought to reinforce its mission in new guidelines on Tuesday that become effective immediately.

"The SFO's primary role is to investigate and prosecute," it said. "The revised policies make it clear that there will be no presumption in favour of civil settlements in any circumstances."

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

"The new SFO policy means that self-reporting by businesses of potential incidents of bribery and corruption, which used be like a cosy fireside chat, has been replaced by a much a stricter regime," said Richard Burger, a regulatory partner at Reynolds Porter Chamberlain.

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

Businesses that decide to meet with the SFO to report an incident 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 discover suspected illegality to question whether there is a benefit in self-reporting.

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

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

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

(Editing by David Holmes)

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