Are we just starting to see the true Richard Alderman? There were suspicions that he was hired as a hatchet man to carve up the Serious Fraud Office or oversee its demise. He was, after all, instrumental in creating the Assets Recovery Agency, becoming its first legal director. Within just five years it had been absorbed into the Serious Organised Crime Agency (Soca).

Alderman denies it. But he has certainly got the bit between his teeth. A few days ago, on the publication of the Serious Fraud Office’s annual report, the recently appointed director declared his colours and outlined plans for a radical recast of the SFO that could transform its role.

It was clearly the blueprint that won him the job. When interviewed, he said that the SFO needed a “complete rethink”: if it did not exist, he added, “would you want to invent it to do what it is doing now? The answer,” he said, “is ‘no’.”

His plans include an American-style fraud-busting strategy in which companies are encouraged to come clean over corruption and fraud and escape prosecution by agreeing to changes in their systems or other steps; use of recently acquired powers for civil recovery orders to seize fraudsters’ assets; and “serious crime prevention orders” (SCPOs), which enable conditions to be placed on companies and how they operate.

He also wants the SFO to be more proactive — to educate people in protecting themselves against fraud, tracing fraudulent activity so that it can be disrupted at an earlier stage and bringing cases much more quickly to court.

But if there is to be less time spent on costly and lengthy prosecutions — such as the £25 million price-fixing prosecution against five drug companies that has just been thrown out — he does not seem to contemplate fewer prosecutions in all. Rather, he envisages the present total of about 65 rising to 100 a year.

And all this within its £43 million budget and 320 full-time staff. Unsurprisingly he has upset people: staff are divided as to whether the direction is correct and four senior managers have resigned, for a variety of reasons that may or may not be connected.

Alderman, 55, is relishing his task. On the day of his appointment in April he gave a series of stilted interviews — not helped by the devastating criticism of the SFO that had just been delivered by the High Court in the challenge to its halting of the BAE Systems arms corruption case. He stonewalled and seemed nervous; one commentator described him as having had a “charisma bypass”.

By contrast, three months into the post, he is expansive and enthusiastic (critics might say zealous): a change that could not be put down to post-prandial bonhomie (he is teetotal). “I am not,” he says, “contemplating failure.” So if he is not countenancing a merger or takeover for the 20-year-old SFO, will the rescue package, or “reinvention”, as he puts it, succeed?

The change has been partly triggered by the recent report by Jessica de Grazia, the former US prosecutor, which said that the organisation had a “pass-the-buck risk-adverse culture, lack of focus and skills”. She said that senior managers lacked skills, knowledge and perseverance. De Grazia also criticised its success rate, which compares unfavourably with similar agencies in the US. SFO prosecutors charged seven defendants in five years, the report said, compared with 50 in the same period by the US Attorney’s Office for the Southern District of New York. The SFO’s conviction rate for 2003 to 2007 was 61 per cent, compared with 92 per cent for the Manhattan District Attorney’s Office. It said: “A criminal justice system that produces this little cannot be said to be effective in deterring, detecting or punishing criminals who commit serious white-collar crimes.”

Not everyone is persuaded that the American route is the answer. Peter Binning, fraud specialist and partner with Corker Binning, says: “I doubt that it is. The US experience has been of the wholesale privatisation of the investigation and prosecution of fraud.” That, he said, has meant “frightening sentences for fraud and terrifying penalties for even minor transgressions for a raft of securities and trade regulations, not to mention anti-terror measures that have enabled prosecutors to put pressure on companies to investigate themselves or face prosecution, damage to reputation and commercial failure \.”

As a result, he argues, lawyers (often former prosecutors) are engaged by companies to produce reports for prosecutors and cut deals, enabling the company to avoid prosecution in return for a fine and, often, the delivery of evidence against key directors and employees. “Thus the prosecuting authorities are handed a case on a plate by the very company that has often committed the fraud but negotiates its way out of prosecution by paying a fine.”

The upshot is “the slow strangulation of entrepreneurship by excessive regulation”, he says. Plans to be more proactive and help the public are “laudable” but “Utopian”; disrupting frauds early “requires sensitive handling” as heavy-footed investigations (possibly based on limited intelligence) can damage shareholders; and powers such as the SCPO should be used sparingly, if at all. “There should be no substitute for good old-fashioned investigation by independent investigators,” he says. A short cut via the threat of draconian measures that do not involve proof of dishonesty beyond reasonable doubt “is not to the benefit of the vast majority of law-abiding people”.

The proposed measures merit consideration, lawyers say; but they urge caution in moving too swiftly down the American route.

Meanwhile, Alderman is right to open the debate. There has remained a question mark over the SFO since the creation of Soca, which also has investigative powers, with its prosecutions done by the Crown Prosecution Service. The SFO model, Binning says, is arguably outmoded. Alderman seems determined to prove otherwise and that it has a future. “Lots of people are critical of the SFO,” he says, “but everybody wants the SFO to succeed.”

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