Police called in over alleged pounds 2m fraud at City stockbroker: Panmure Gordon employee and share certificates are missing

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CITY OF LONDON Police are investigating an alleged pounds 2m fraud at Panmure Gordon, the City stockbroker, involving an employee who left two weeks ago and cannot be traced, writes John Willcock.

John Lithiby, chairman of Panmure, said yesterday that an internal audit a fortnight ago revealed that roughly pounds 2m of share certificates were missing.

'The matter was discovered a couple of weeks ago and reported to the City of London police immediately,' he said. 'It involved an individual in the back office who left of his own volition. It is very tiresome, but there we are.'

Mr Lithiby refused to say what kind of stock was involved. If it consists of bearer shares these could be cashed with no identification required.

Mr Lithiby said he hoped the case would not damage Panmure's reputation with its corporate clients, which include Argyll Group, Dunhill Holdings, Vosper Thornycroft and Wessex Water.

'No client has suffered or will suffer,' he added. 'It is an isolated case involving one individual.'

As to the whereabouts of the employee concerned, Mr Lithiby said: 'I wish we knew.'

A spokesman for the Securities and Futures Authority, the City regulator responsible for Panmure, said last night: 'We are aware of a problem in Panmure but it is in the hands of the police, who are seeking the missing stock.'

Panmure is owned by NationsBank, which is among the 10 largest banks in the US after being formed in a merger three years ago between North Carolina National Bank, C&S Sovran and several purchases of savings and loans institutions.