A week after the SFO came under fire in the commons for its handling of the Asil Nadir case, the commission said the Government should mount an urgent study of merging it with the Fraud Investigation Group of the Crown Prosecution Service.
The effect would be to extend the SFO's much-feared power to override suspects' right to silence to a much larger number of cases.
The commission said there was 'no justification in principle for the present division of responsibilities and powers. The same body should investigate all cases of serious and complex fraud and the same powers should be available to the investigators'.
The commission's 17 recommendations on serious fraud included strong backing for the continuation of the SFO's special power as well as detailed proposals for how early disclosure of the defence case and plea bargaining would operate in fraud trials.
The commission accepted the SFO's suggestion that the courts should be allowed to bring City regulators into the plea bargaining process. In return for guilty pleas, defendants would agree to accept 'severe regulatory penalties' instead of jail sentences. These could include fines and disqualification from office.
The commission said it was seriously concerned that the powers and resources for investigating serious and complex fraud were 'not available to all those charged with the task', particularly when the number of offences and amounts involved were increasing.
The FIG currently handles 400 cases with a total of more than pounds 3.8bn at risk, compared with the 57 cases involving pounds 6.25bn being investigated by the SFO.
It is believed that a merger would lead to many of the smaller FIG cases being devolved to regional offices of the CPS, with the SFO taking the more serious and complex jobs.
The FIG cannot use Section 2 of the Criminal Justice Act 1987, which allows the SFO to force defendants to give interviews and produce documents even after they have been charged, on pain of imprisonment.
The commission said it recommended an urgent study rather than immediate merger because of differences in working methods. The SFO mounts team investigations while the FIG mainly advises on investigations by the police.
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