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First Prosecution for Destruction of Documents

Posted on 29 September 2019

The FCA has charged Konstantin Vishnyak, a former banker at VTB Capital, in relation to a destruction of documents offence under FSMA 2000.  This is the FCA’s first prosecution in relation to destruction of documents.

In summary, under section 177(3)(a) of FSMA, a person who knows that an investigation is being conducted, is guilty of an offence if he destroys or otherwise disposes of a document which he knows or suspects is relevant to the investigation. The FCA alleges that Vishnyak deleted a WhatsApp application from his mobile phone after he was required to provide it as part of an insider dealing investigation.  It will be a defence if Vishnyak can show that he had no intention of concealing facts disclosed by the documents from the investigator.

It is plainly important that the regulators and the firms they regulate, as well as individuals defending disciplinary proceedings, have access to relevant documents. The process of managing the preservation of documents has become all the more complex with the proliferation of devices and applications held by firms and individuals. The fact that the FCA has brought the prosecution at all may well focus the minds of those seeking to conceal or destroy evidence. Should the prosecution be successful, that will no doubt add significantly to the deterrence.

The case is due to be heard on 4 October at Southwark Crown Court.

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