Investors aim to recover pounds 10m

An international accountancy organisation is contesting a High Court claim that it is liable for a multi-million pound fraud perpetrated by a former executive director, the confidence trickster Nicholas Young.

Young, son of a chaplain to the Queen, served a prison sentence for swindling investors by betting with their money instead of putting it into the high-yielding offshore fund he had promised.

Yesterday, 120 investors began an action to recover pounds 10m gambled away by Young while he was a senior executive of Clark Kenneth Leventhal.

The investors claim Young's employers facilitated the fraud by placing him in a "respectable" position and failing adequately to supervise his dealings with third parties.

The claim is based on argument that Young acted as agent for the defendants who received money through that agency; that the defendants are vicariously liable for his fraud, and that they are liable in negligence.

In a hearing expected to last up to 15 weeks, CKL and two of its members at the time of the fraud - Clark Whitehill, sued as representing itself and other member firms, and Swedish accountants Bangstad Revisionsbyra AB - deny all liability for Young's dishonest activities.

Alan Newman QC told Mr Justice Dyson that, without the position he occupied as international executive officer of a prestigious group of accountancy practices, Young could not have carried conviction.

"Without it, he could not have convinced others he had access to offshore investments and favourable tax treatment," said Mr Newman.

He operated with apparent openness for over 12 years "with the appearance of the knowledge and support of CKL and Clark Whitehill and with the seal of authenticity this gave him", said Mr Newman.