Clowes advisers face writs

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The Independent Online
Independent financial advisers implicated in the Barlow Clowes affair are back in the firing line following an appeal decision against the collapsed investment fund's auditors.

Treasury officials confirmed at the weekend that the ruling by the accountancy profession's watchdog cleared the way for the Government to pursue third- party claims, from which it hopes to recover some of the pounds 150m it paid in compensation to defrauded investors in 1991.

Dozens of writs were initially issued against third parties, mostly IFAs who persuaded punters to put their money into Barlow Clowes's gilt fund.

At least six big cases - including actions against Midland Bank, law firm Simpson Curtis, merchant bank Singer & Friedlander, and broker Rensburg - have already been settled out of court, recouping pounds 20m for the Government. However, the Treasury would not say how many are still outstanding.

The final obstacle to continuing with the suits was removed last week, when an appeal committee of the Joint Disciplinary Scheme set up by the Institute of Chartered Accountants increased the bill for partners in Spicer & Pegler, Barlow Clowes's auditor, from pounds 350,000 to pounds 441,000. The fine was actually reduced by pounds 50,000, but this was more than offset by pounds 141,000 in legal costs.

About half the 200 partners have retired since Barlow Clowes collapsed, while many of the remainder are now with Deloitte & Touche, which took over Spicer.

Settlement of the remaining suits, which are being handled for the Treasury by City law firm Clyde, would finally bring the long-running scandal to a close.

Barlow Clowes had promised investors that it would put their money into government bonds, famous as the safest of investments. But it had also claimed that it would achieve better than average returns on the gilts through clever trading.

In fact, much of the cash raised from new sources went to support the extravagant lifestyle of the company's founder, Peter Clowes.

He served four years of a 10- year prison sentence and now lives near Manchester.

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