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Toby Duthie

Toby Duthie

Forensic Risk AllianceAudrey House16-20 Ely PlaceLondonEnglandEC1N 6SN
Watch interview with Toby Duthie

Thought Leader

Thought Leaders Global Elite - Forensic Accountants 2021

Q&A

WWL Ranking: Global Elite Thought Leader

WWL says

Investigations specialist Toby Duthie comes highly recommended by peers and clients alike for his “pragmatic and commercially minded” approach and profound expertise in handling complex forensic analysis.

Questions & Answers

Toby Duthie is a founding partner of FRA, head of its UK and European offices and Who’s Who Legal’s Investigations Forensic Accountant of the Year 2018 and 2019. He has more than 20 years’ experience in financial analysis, complex financial modelling, investigations and compliance reviews. Toby has particular expertise in various forms of multi-jurisdictional investigations, many involving complex disgorgement and fine calculation and (in)ability to pay analysis, including for Airbus (€3.6 billion), Rolls-Royce (£671 million), SBM (US$238 million) and Teva (US$521 million).

What motivated you to pursue a career in forensic accounting? 

I left the world of investment banking to start FRA not only because the work of a forensic accountant is interesting, but also because it is valuable. My co-founders and I established FRA as we saw – and still see – a need for a fully independent forensic adviser. Conflicts of interest are increasingly an issue for clients and many of our bigger competitors. 

I believe an effective forensic accountant makes the effort to understand the client’s business and challenges, and articulates findings in a clear and coherent manner. I am grateful to have worked with amazingly talented lawyers and companies in this way.

How does Forensic Risk Alliance distinguish itself from competition in the market? 

Unlike most accounting firms, we operate purely in the forensic space and generally have few conflicts. Independence is increasingly important – critical even - to boards, audit committees and regulators.  We are market leaders offering extensive multi-jurisdictional data privacy, transfer and protection expertise in order to assist our clients in achieving their objectives with compliance, litigation and investigations. At FRA, we understand that clients dealing with complex matters need technical expertise delivered in an understandable and actionable way. We have built lasting relationships with our clients on this basis.

What new types of fraud are you seeing emerge during the covid-19 pandemic? How are you ensuring that you and your clients are well equipped to tackle the forensic challenges they pose? 

We see the unprecedented government bailouts leading to significant opportunities for fraudulent acts. The liquidity crunch will reveal, as Warren Buffet says, ‘who has been swimming naked’. We see a lot of future forensic activity around financial statements fraud and audit negligence claims. While the global covid-19 pandemic is unprecedented, helping our clients anticipate this new risk landscape, manage the disruption and develop forward-looking action plans is in many ways business as usual for the FRA team. Since FRA’s inception, we have deployed remote data collection, remote transaction testing, remote interviews and other remote procedures. Our team offers customised and regulatory-compliant solutions, which allow clients to adjust to this new virtual landscape. 

To what extent is the increasingly virtual nature of investigations in a covid-19 landscape making for a more efficient process? In what aspects is it falling short? 

Regulators have been urging businesses to adopt technology and data-driven tools for investigations and compliance for a long time, and the current pandemic is accelerating the digitisation of the workplace and providing an opportunity for businesses to take advantage of these data-driven approaches. FRA is working with partners and clients to ensure data can continue to be managed safely, even in the context of the highly technical and complex data landscape often faced in financial crime and sanctions investigations. Using portals and data transfer protocols that maximise cybersecurity and encryption, the team efficiently gathers data from diverse technologies, ranging from databases to robotics.

However, technology cannot be the complete solution even in the ‘new normal’. As investigators, you want to be in the room with the people. We are creatively leveraging tools such as video to ensure that the data acquired during investigations is properly downloaded. Specialist technology teams deploy artificial intelligence and machine learning while working remotely with clients to ensure forensic standards are maintained.

How is technological innovation revolutionising the practice area at the moment? 

AI can drive efficiency and effectiveness in investigations by quickly identifying the critical focus areas or smoking guns in a massive corpus of information, saving time and money and producing better results compared to manual procedures. Due to minimal adoption to date by attorneys, forensic accountants and data governance / e-discovery providers, AI technology is still very much in the development stages in relation to the investigations industry, in contrast to the consumer market. Within this decade however, AI technology in the investigations space will continue to improve as regulators begin to encourage or expect the use of it in multi-jurisdictional investigations. 

Looking back over your career, what is the most memorable case you have been a part of? 

The first matter we ever worked on as a firm: the German slave labour Holocaust restitution. We met amazing people including the likes of Simon Wiesenthal, members of the Jewish community that were looking for reparations from the German government, Swiss banks, etc. We ended up working on that for five years and paid out over 10 billion dollars to various survivors. That really was our first exposure into cross-border data transfer litigation and government-backed restitution efforts, so it was a huge learning curve and massively interesting, both emotionally and intellectually.

Where, in your opinion, does the future of the practice area lie? 

From a technical perspective, the evolution and importance of data governance and analytics has driven the need to find a way to efficiently process and query vast amounts of transactional and unstructured data. Global investigations nowadays almost always involve hundreds of thousands of documents; if not millions. For larger, more complex matters, AI technology-assisted review will soon be seen as an increasingly efficient cost-effective way to handle large-scale reviews and production. The real breakthrough will come when AI can analyse and link both structured (eg, accounting) and unstructured (eg, email, WhatsApp) communications and this is beginning to happen. Exciting times ahead.

WWL says

The “excellent” Toby Duthie is a top-tier name who comes “highly recommended” for his approach to cross-border and anti-bribery investigations.

Questions & Answers

Toby Duthie is a founding partner of FRA, head of its UK and European offices, and WWL’s Investigations Forensic Accountant of the Year (2018 and 2019). He has more than 20 years’ experience in financial analysis, complex financial modelling, investigations and compliance reviews. Toby has particular expertise in various forms of multi-jurisdictional investigations, many involving complex disgorgement and fine calculation analysis, including for Airbus (€3.6 billion), Rolls-Royce (£671 million) and Teva (US$521 million).

What inspired you to establish your own forensic accounting firm? 

We established FRA as we saw a need for a fully independent, conflict-free forensic adviser, which is increasingly an issue for clients and many of our bigger competitors. We wanted to develop a market-leading practice, highly respected with deep subject-matter expertise. Having celebrated our 20th anniversary milestone last year, we are grateful to our clients and colleagues who trust us to effectively play this role in many of today’s highest-profile matters. 

What do clients look for in an effective forensic accountant? 

People they can trust. An effective forensic accountant makes the effort to understand the client’s business and challenges, and articulates findings in a clear and coherent manner. At FRA, we understand that clients dealing with complex matters need technical expertise delivered in an understandable and actionable way. We have built lasting relationships with our clients on this basis. 

What is the greatest challenge you face when trying to harmonise processes with different authorities and regimes in multilateral investigations? 

Key issues include ensuring conduct is not penalised across multiple jurisdictions, but is reasonably allocated; agencies realise that data, financial information and employee communications located in one jurisdiction may not be readily transmitted to other jurisdictions; and the calculation of economic benefit and eventual penalty should follow a consistent and reasonable accounting approach, irrespective of the jurisdiction. Companies must maintain informative engagement with all agencies, and in particular, encourage all agencies to engage with others throughout the investigation.

How has the rise of monitorships outside the Anglo-Saxon environment impacted the market? 

Anglo-Saxon entities represent today less than half of the current monitorships under the DOJ criminal division’s fraud section. In parallel, some countries, such as France, have recently developed similar regulations, leading to a global alignment on approaching fraud and corruption issues. We have seen in recent years greater structuring of the compliance environment in what were previously less mature territories, such as Europe. Companies have an increasing awareness of regulatory requirements, and compliance programmes are becoming the norm. 

We have worked and are working on some AFA matters, as well as US monitorships, which involve information sharing with non-US authorities. In the post-covid-19 world, we think there may be more of these – especially if companies plead inability to pay large fines, and perhaps money is better spent on remediation than on punishing past acts and putting people out of work. There are also areas such as audit and environmental issues, which are maybe not easily financially quantifiable or may have impact way beyond profits, where monitorships can be an extremely effective way to change practices and culture.

What do you consider to be the main challenges presented to forensic accounting by artificial intelligence? 

AI can drive efficiency and effectiveness in investigations by quickly identifying the critical focus areas or smoking guns in a massive corpus of information, saving time and money and producing better results compared to manual procedures. Owing to minimal adoption to date by attorneys, forensic accountants and e-discovery providers, AI tech is still very much in the development stages in the investigations industry, in contrast to the consumer market. Within this decade however, AI tech in the investigations space will continue to improve as regulators begin to encourage or expect its use in multi-jurisdictional investigations. There will always be a human element to these types of investigations, as you will always need human judgement and experience.

In your opinion, how will covid-19 affect your practice? 

While the pandemic is unprecedented, helping our clients anticipate this new risk landscape, manage the disruption and develop forward-looking action plans is in many ways business as usual for our team. Since FRA’s inception, we have deployed remote data collection, transaction testing, interviews and other procedures. We offer customised, regulatory-compliant solutions that allow clients to adjust to this new virtual landscape. We also see the unprecedented government bailouts leading to significant opportunities for fraudulent acts. The liquidity crunch will reveal, as Warren Buffett says, “who has been swimming naked”. Watch out for a lot of financial statement fraud investigations – they are already starting.

What steps can companies take to ensure they are agile in the face of increasing compliance requirements? 

Companies can ensure that compliance teams are assigned an appropriate budget and stature within the wider business structure and strategy. Compliance should have a seat at the table for all important business decisions. Having a well-resourced compliance team from the outset will greatly improve agility, compared to waiting until problems arise before consulting the compliance team. Experienced compliance professionals should be encouraged to use technology to improve processes where possible. Also critical is to embed compliance awareness in the frontline operations – sales, accounting, logistics, etc – as prevention is better than investigation and remediation.

How do you envisage compliance and regulatory scrutiny from the authorities developing in the next five years? 

As case law deepens and requirements become more defined, regulatory scrutiny is going to become increasingly focused. Expectations of companies to have more robust and complete programmes will intensify, and fines will increase. There have been reports of regulators hiring forensic experts from the private sector in order to strengthen enforcement capabilities. There will also be more multi-jurisdictional cooperation following the successful prosecution of Airbus and potential industry sweeps. 

Global Leader

WWL Ranking: Recommended

WWL says

Investigations specialist Toby Duthie comes highly recommended by peers and clients alike for his “pragmatic and commercially minded” approach and profound expertise in handling complex forensic analysis.

Biography

Toby Duthie is a founding partner of FRA and head of its UK and European offices. He has more than 20 years’ experience in financial analysis, complex financial modelling, investigations and compliance reviews. Fluent in English and German, Toby has particular expertise in multi-jurisdictional investigations, anti-bribery and corruption compliance testing; he also specialises in matters of government enforcement.

Toby has worked on many complex financial frauds and bribery investigations, most notably leading the FRA team supporting Airbus in a multi-year, multinational investigation, resulting in €3.6 billion settlement with four investigative authorities: the UK Serious Fraud Office (SFO), the US Department of Justice (DOJ), the US Department of State (DOS) and the French Parquet National Financier (PNF). FRA advised Airbus and its counsel from the early stages in designing a robust and forensically based approach to the investigation, customising a data governance strategy alongside compliance risk assessment and remediation support, as well as the eventual fine calculation.

He has also been involved in other disgorgement and fine calculation analysis requiring modelling in multiple jurisdictions including the Rolls-Royce DOJ, SFO and Brazilian settlement, worth £671 million; the US$521 million Teva settlement; and the SBM Offshore DOJ settlement, worth US$328 million.

Toby has been integral in resolving high-profile enforcement cases going back to 2004 including Innopsec, Panalpina, Total, Technip Bonny Island LNG and the Diebold FCPA monitorship. He has worked on matters involving UK, US, Swiss, Brazilian, Dutch and French regulators, and has extensive experience calculating damages in FCPA enforcement actions. He has worked on four of the 10 largest FCPA settlements.

Toby sits on the editorial board of Global Investigations Review (GIR), and was recently featured on BBC Radio Four’s Law in Action, a long-running legal programme. He is instrumental in developing the firm’s practice across Europe and previously set up the UK’s first third-party litigation funding company in 2002 (IM Litigation Management Limited) which pursued over 50 claims with a success rate exceeding 70 per cent. Highly regarded and trusted within the industry, clients note: “There is no one better in the field.”

A graduate with honours from University College London, Toby worked as a steel trader in Hong Kong and in the investment banking division of Deutsche Bank/Morgan Grenfell.

WWL Ranking: Global Elite Thought Leader

WWL says

"Toby is simply the best"
"He is a top-quality forensic accountant"
"He is one of the most articulate financial experts I have every come across"

Biography

Toby Duthie is a founding partner of FRA and head of its UK and European offices. He has more than 20 years’ experience in financial analysis, complex financial modelling, investigations and compliance reviews. Fluent in English and German, Toby has particular expertise in multi-jurisdictional investigations, anti-bribery and corruption compliance testing; he also specialises in matters of government enforcement.

Toby has worked on many complex financial frauds and bribery investigations, most notably leading the FRA team supporting Airbus in a multi-year, multinational investigation, resulting in €3.6 billion settlement with four investigative authorities: the UK Serious Fraud Office (SFO), the US Department of Justice (DOJ), the US Department of State (DOS) and the French Parquet National Financier (PNF). FRA advised Airbus and its counsel from the early stages in designing a robust and forensically based approach to the investigation, customising a data governance strategy alongside compliance risk assessment and remediation support, as well as the eventual fine calculation.

He has also been involved in other disgorgement and fine calculation analysis requiring modelling in multiple jurisdictions including the Rolls-Royce DOJ, SFO and Brazilian settlement, worth £671 million; the US$521 million Teva settlement; and the SBM Offshore DOJ settlement, worth US$328 million.

Toby has been integral in resolving high-profile enforcement cases going back to 2004 including Innopsec, Panalpina, Total, Technip Bonny Island LNG and the Diebold FCPA monitorship. He has worked on matters involving UK, US, Swiss, Brazilian, Dutch and French regulators, and has extensive experience calculating damages in FCPA enforcement actions. He has worked on four of the 10 largest FCPA settlements.

Toby sits on the editorial board of Global Investigations Review (GIR), and was recently featured on BBC Radio Four’s Law in Action, a long-running legal programme. He is instrumental in developing the firm’s practice across Europe and previously set up the UK’s first third-party litigation funding company in 2002 (IM Litigation Management Limited) which pursued over 50 claims with a success rate exceeding 70 per cent. Highly regarded and trusted within the industry, clients note: “There is no one better in the field.”

A graduate with honours from University College London, Toby worked as a steel trader in Hong Kong and in the investment banking division of Deutsche Bank/Morgan Grenfell.

Awards won by Toby Duthie


Who's Who Legal Awards 2019


> Investigations Forensic Accountant -
Expert of the Year

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