Being investigated for fraudulent trading can be alarming, especially if you are a company director or involved in business management. Allegations often arise in the context of insolvency, company accounts, or the misuse of corporate funds, and can carry serious criminal and civil consequences. Individuals under investigation may worry about arrest, bail, and the impact on personal and professional life. This article explains how fraudulent trading is prosecuted, what the authorities consider when assessing bail, and practical steps you can take to protect your position while the investigation continues.
Fraudulent trading is a serious criminal offence linked to how a business has been run. In England and Wales, it is most commonly prosecuted under Section 993 of the Companies Act 2006. The offence arises where a company has carried on business with the intention to defraud creditors, or for any fraudulent purpose.
In practical terms, allegations often focus on accusations that directors or senior managers knowingly allowed a company to trade dishonestly. This might involve taking customer payments when there was no realistic prospect of supplying goods or services, moving money to avoid creditors, or continuing to incur debts while concealing the true financial position of the business.
Although fraudulent trading is not a violent offence, it is treated as very serious. It frequently involves large sums of money, multiple alleged victims, and complex financial evidence. Investigations can be lengthy and may run alongside insolvency proceedings, director disqualification action, or regulatory investigations.
If you are accused, it is important to understand that being investigated for fraudulent trading does not automatically mean guilt. These cases often turn on intention, knowledge, and what was reasonably believed at the time decisions were made.
An arrest for fraudulent trading often follows a long investigation rather than an urgent incident. You may have been interviewed previously under caution or contacted by investigators before arrest. In some cases, arrest occurs to allow searches of property, seizure of digital devices, or to prevent suspected interference with evidence.
After arrest, you will usually be taken to a police station for questioning. Interviews may be conducted by specialist police units or bodies such as the Serious Fraud Office. Given the complexity of the allegations, interviews can be detailed and technical, focusing on financial decisions, documents, and communications over a long period.
The police then have several options. They may:
Which route is taken depends on risk factors, the stage of the investigation, and whether further controls are seen as necessary.
Police bail means you are released from custody but subject to specific conditions and a return date. Bail conditions are legally binding. If you breach them, you can be arrested again and potentially charged.
Release under investigation (RUI) means you are released without conditions and without a fixed date to return. The investigation continues, and you may be contacted months later for further interview or a charging decision. While RUI can feel less restrictive, it offers less certainty and no formal timetable.
For fraudulent trading, police bail is often used where investigators want to impose controls, such as restrictions on financial activity or contact with others connected to the business. Bail allows these safeguards while the investigation continues.
Yes, it is possible to be granted bail for fraudulent trading, and in many cases bail is considered appropriate. However, it is not automatic.
Because fraudulent trading is a financial and dishonesty-based offence, the main concerns are not usually about physical harm but about financial risk, interference with evidence, and the integrity of the investigation. Bail may be refused if the police or court believe there is a real risk that you might:
If the risks can be managed through conditions, bail is more likely to be granted. If they cannot, custody may be considered necessary, particularly in the early stages of a complicated investigation.
If bail is granted, conditions are often tailored to limit financial and business-related risks. These are not punishments; they are controls designed to protect the investigation and the public.
Conditions in fraudulent trading cases commonly include restrictions such as limits on business activity, requirements to provide financial information, or prohibitions on contact with certain individuals. You may also face reporting requirements to a police station and restrictions on overseas travel, particularly if there is concern about assets or links abroad.
The exact conditions depend on the allegation, your role within the business, and the perceived risks. A well-argued bail package can often reduce the scope and impact of conditions where they are more onerous than necessary.
Bail decisions are discretionary and based on risk, not on whether the police believe you will ultimately be convicted. In fraudulent trading cases, the following factors are particularly relevant.
Finally, the availability of proportionate bail conditions will be considered. If risks can be managed by conditions, bail is more likely than if custody is seen as the only effective option.
Early preparation makes a significant difference. Even before a bail decision is made, practical steps can reduce concerns and present you as cooperative and reliable.
Providing clear information about your address, employment situation, and financial arrangements can help address fears of absconding or continued offending. Being transparent about business roles and access to accounts may allow sensible conditions rather than outright refusal of bail.
It is also important to avoid any conduct that could be interpreted as interference, such as contacting potential witnesses or altering documents. Even well-intentioned actions can be misunderstood.
Most importantly, having structured legal representations that address specific risks – rather than general assurances – is often key. Bail is not about character references alone; it is about whether risks can realistically be controlled.
A solicitor experienced in serious financial crime can intervene at an early stage to influence how bail is approached. This may involve making representations to the police before bail is decided, arguing for release under investigation, or proposing tailored conditions that meet investigative concerns.
Where bail is refused by police, a solicitor can make an urgent application to the Magistrates’ Court. In doing so, they will focus on the legal framework and the proportionality of continued detention, rather than the merits of the allegation itself.
In complex fraudulent trading cases, a solicitor can also liaise with investigators about document preservation, access to business records, and the practical reality of proposed conditions. This can prevent overly restrictive bail that unnecessarily disrupts family life or legitimate employment.
Effective bail advocacy is strategic, detailed, and rooted in the specific facts of your case. A good solicitor will guide you through every step to ensure you have the strongest defence.
If you are facing an allegation of fraudulent trading and are concerned about bail, early legal advice is essential. A specialist criminal defence solicitor – like the ones you will find at Stuart Miller Solicitors – can assess the risks, advise you on likely outcomes, and develop a clear bail strategy focused on protecting your liberty. Having experienced support at this stage can make a meaningful difference, so get in touch today for your free consultation.
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