Also charged were Stewart Armer, who worked alongside Mr Young as a fund manager at Morgan Grenfell Asset Management, and Erik Langaker and Jan Helge Johnsen, of Fiba Nordic Securities, a Scandinavian broking firm with which Mr Young allegedly had dealings.
The three were released on conditional bail to appear at the City of London magistrates court on 10 November. The charges relate to the so- called Peter Young affair which severely damaged the reputation of Morgan Grenfell Asset Management when it hit the headlines in August 1996.
Morgan Grenfell's German parent, Deutsche Bank, paid pounds 400m to bail out 180,000 of its clients after funds for which Mr Young was responsible were found to have lost money on investments in unlisted companies, which are illiquid and therefore considered higher risk than quoted companies.
Morgan Grenfell was also fined pounds 2m - the highest fine levied in the UK on a financial services institution.
Mr Young managed Morgan Grenfell's European Growth Fund and European Capital Growth Unit Trust, both of which were found to to be in breach of rules preventing more than 10 per cent of the fund being invested in non-quoted stocks.
The decision to prosecute comes despite the fact that Mr Young has declared himself mentally and legally incompetent and not able to look after his own affairs.
Six staff left Morgan Grenfell over the affair, including Mr Young and Mr Armer. Four were later suspended by the Investment Management Regulatory Organisation (Imro) from working in the City for periods of between 16 months and three years and forced to pay up to pounds 91,000 costs.
These include Mike Wheatley, the former director of compliance, and Glyn Owen, another senior MGAM executive.
Keith Percy, the former chief executive, is contesting his Imro ban. He is now advising his former colleague Nicola Horlick who left Morgan Grenfell to set up a new fund management operation at Societe Generale. The fact that Mr Percy was made to bear some of the responsibility for the damage caused by the Young affair was one of the factors behind Mrs Horlick's own very public falling out with Morgan Grenfell later that year.
Pending his appeal, Mr Percy has been working as a consultant at Societe Generale Asset Management but is understood to have applied for Imro registration as a marketing executive.
The Young case will be the first test of the SFO in a high-profile City prosecution since the collapse of the Maxwell case. It is also a key test for Ros Wright, the new head of the SFO.
Mr Young was alleged to have set up a string of shell companies in Luxembourg between July 1995 and May 1996 to shelter his dealings in little-known unlisted companies, mainly in the hi-tech sphere. Many of them were based in Scandinavia.Reuse content