A letter from FSA chief executive John Tiner to Liberal Democrat Treasury Select Committee member Norman Lamb suggests the regulator dropped its criminal investigation into the split capital investment trust sector many months before its Christmas Eve deal with providers.
The Times says the letter came in response to an inquiry by Lamb into why the FSA seemed to change tack between last summer, when its chairman Callum McCarthy made statements suggesting criminal collusion in the sector, to the deal that saw some £194m pledged in compensation, but nobody actually facing regulatory discipline.
Tiner’s letter refers to lack of evidence and the need to make any prosecution in the public interest as reasons why the regulator changed its mind.
However, The Times quotes a “senior FSA official” stating that dropping the criminal investigation was a necessary step to reach agreement on the deal announced on Christmas Eve.
Hurt punters are unlikely to gain any advantage from the latest news, The Times warns, with other members of the Committee “cool” to the idea of recalling Tiner to explain the issue further, and with Tory Committee member Michael Fallon recently joining Collins Stewart as a non-executive director - one of the firms party to the deal with the FSA.
AND ON THE TOPIC of City folk, The Daily Telegraph reports Aberdeen Asset Management is today dealing with the aftershock of being sacked as manager of four Venture Capital Trusts in favour of competitor Close Brothers.
”It is virtually unheard of for a venture capital trust to remove a fund manager,” the paper says.
”AAM chief executive Martin Gilbert admitted that the four trusts, the Murray VCT 1, 2, 3 and 4, had endured a run of poor performance but said the company had fired their managers and appointed a new team headed by Judith Mackenzie which had produced returns of between 29pc and 36pc over four months.”
The Telegraph says Close Brothers Securities is broker to the trusts, although run as a separate business to Close Venture Management – which has been brought in to run the trusts.
”Emil Gigou, a director of Close Venture Management, said the trusts' directors had thought long and hard before removing Aberdeen. He said: ‘There are 20 directors between the four funds and all were unanimously agreed that this was the right thing to do.’”
US ACCOUNTING RULES HAVE set business soaring for the big four accounting firms – PricewaterhouseCoopers, KPMG, Ernst & Young, and Deloitte – because of tougher US accounting rules, the FT reports.
Sarbanes-Oxley, the Act passed by Congress following huge accounting scandals involving companies such as Worldcom and Enron, provides for tougher criminal sentencing for companies and directors not operating within the law.
The chief driver of rising profits has been section 404 of the law, which requires companies to beef up internal controls designed to better spot fraud. Audit fees for overseeing the implementation of Section 404 measures have soared, with some estimates of implementing Sarbanes-Oxley running at up to $8m for each of the top 500 US firms.
COSTS OF living for poorer pensioners are highlighted in The Scotsman, which writes on a new survey suggesting nearly four million pensioners have cut back on spending on necessities such as medicines in the past six months to make ends meet.
Figures from the Prudential research suggest 40% of pensioners live on less than £10,000 annually, and up to 300,000 have actively avoided going to see a doctor or seek medication in order to save money.
An estimated 160,000 took to gambling in the hope that a win would balance their personal budgets, while 1.6 million pensioners have been forced back to work to maintain a suitable standard of living.IFAonline
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000
Two roles created