UBS subsidiary faces Jersey fraud charges

Click to follow
The Independent Online
A Jersey-based subsidiary of Union Bank of Switzerland, one of its senior managers and a former Deloitte & Touche partner in Nottingham face a total of 29 charges of fraud following investigations into alleged currency trading losses of $26.7m (pounds 16.6m). The investigation was carried out by the States of Jersey Police, which received assistance from the Serious Fraud Office.

Cantrade Private Bank Switzerland (CI), the offshoot of UBS, said it would deny the 12 offences it is alleged to have committed between 1988 and 1993. The bank has suspended Peter Stoneman, the manager allegedly involved, pending the outcome of nine charges made against him.

The bank and Mr Stoneman have been charged under the Investors (Prevention of Fraud) (Jersey) Law. The alleged offences relate to misleading and reckless statements and the concealment of material facts.

The former Deloitte & Touche partner, tax adviser Alfred Williams who retired from the firm's Nottingham partnership in 1994, faces eight charges alleging that he made reckless, misleading, false or deceptive statements.

All the 29 charges made yesterday relate to currency trading carried out in Jersey by a Dr Robert Young, who faced two separate fraud charges in Jersey's Magistrates Court in August. Some 90 investors, who placed substantial funds with Dr Young via Mayo Associates, Swiss investment managers, allege that huge losses were hidden from them.

He denies the charges and is on bail in Nottingham. He could not be contacted yesterday.

Mr Williams, who also could not be reached for comment yesterday, was an Inland Revenue tax inspector before joining Spicer & Oppenheim in 1989, becoming a partner of Touche Ross in 1990 when Spice & Oppenheim was taken over by the firm. Touche Ross subsequently merged to form Deloitte & Touche.

The States of Jersey Policy alleges that Cantrade Private Bank induced investors to take part in currency deals.

Cantrade Private Bank said in a statement: "The charges against the bank are being investigated and, subject to the investigation, will be contested. A plea of not guilty will be entered at the appropriate time."

The bank has been summoned to appear at the Royal Court in Jersey on 6 December to answer 12 charges. Mr Stoneman will appear on 6 November while Mr Williams, will appear at the magistrates court on 6 November. Dr Young is not due to come before the court until next year.

While Deloitte & Touche does not face any criminal charges, the firm, along with Cantrade Private Bank, already faces civil action brought by Mayo Associates.

Mayo Associates claim that Mr Williams audited Dr Young's trading figures, which allegedly falsely claimed trading profits. Both Deloitte & Touche and Cantrade are defending the civil action which was initiated in 1994.

Deloitte & Touche said it did not act as auditor to the trading accounts and that Mr Williams, who retired in 1994, provided tax and accouting advice for Dr Young.

The 90 investors are also taking civil action against Jersey's Finance and Economices Committee which they say refused in 1994 to investigate their complaints about Dr Young.

At the time the committee decided not to investigate the bank under its regulatory powers following advice from its legal and financial advisers which said there were no grounds for concern about the bank.

While Cantrade Private Bank said Dr Young was not one of its employees, the investors allege that under a secret deal the commissions on the currency trades were shared between the bank and Dr Young.

Gill Brouchard, one of the investors in Jersey who is seeking to recoup $25,000 invested with Dr Young, said: "It's taken them a long time to bring the charges, two and a half to three years, but I'm glad they finally believe they have the evidence." The money was invested by her partner who has since died.

Comments