Number of SIB cases referred to fraud squads falls: Annual report shows 90% trial success rate

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The Independent Online
THE Securities and Investments Board's annual report showed a sharp fall in the number of investment frauds referred for criminal investigation last year, even though the number of complaints and investigations begun during the year increased.

It referred 42 cases to the Serious Fraud Office or police fraud squads in the 12 months to 31 March, down from 61 in 1992/3. The number of continuing investigations rose from 22 to 30.

There are seven cases in trial or awaiting trial, and four concluded. Of those completed the SIB won every time. Its conviction rate stands at 90 per cent. Successful convictions included a four-year prison sentence for Kenneth Renton, controller of Wentworth Asset Management, and two-to-five- year sentences for four managers of Hamilton House.

The number of new investigations rose to a record of 457, up from 410. In 20 cases the SIB had to use its powers under section 105 of the Financial Services Act, compelling people to attend interviews or produce documents.

The number of complaints about member firms received by the regulators in 1993/4 was 7,605, compared with 6,647 in calendar 1992. Complaints about members of Lautro, which regulates insurance and unit trust companies, explained the increase, due to the extra publicity Lautro had given its complaint procedures.

Areas of repeated complaint were schemes involving investment in 'standby letters of credit', schemes speculating in foreign exchange markets, and 'multi-level marketing schemes' - sophisticated chain letters.

The report said it had been a year of notable firsts in the SIB's enforcement efforts. It was the first year it had disqualified unfit individuals - including Roger Levitt, who also received a sentence of 180 hours' community service after his conviction.

The country's senior financial services watchdog also recruited its first in-house litigation specialist and set up an early warning team to identify potential hazards to investors.