Outlook: Trustees pay the price

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The Independent Online
UNTIL the balloon went up, courtesy of Peter Young, the job of trustee to a unit trust must have seemed one of the easier ways of making money known to man, or at least to the City. Fund managers simply don't bend the rules by playing fast and loose with investors' money do they? The Morgan Grenfell Asset Management scandal rudely interrupted those assumptions and caused a scramble among trustees to ensure their compliance checks were up to scratch.

Peter Young was dismissed almost immediately although no other disciplinary action has yet been taken. Five other Morgan Grenfell executives have paid with their jobs too. The firm itself has paid both a hefty fine and compensation. Now, at last, 18 months after the scandal came to light, the regulatory authorities in the shape of Imro, have caught up with the trustees, first General Accident and then Royal Bank of Scotland.

It was their job to ensure Mr Young was investing clients' money within the rules, particularly those relating to what proportion of funds could be put into highly speculative, unlisted securities. They have now agreed to pay fines and costs totalling pounds 800,000 - paltry set against the pounds 220m that disappeared, but nevertheless proportionate to their role in the catalogue of failures that allowed the affair to happen.