Imro offers deal to firms that admit mis-selling

Imro, the fund managers' watchdog, is offering to deal more leniently with members who were guilty of mis-selling personal pensions, as long as they admit the offence.

The regulator has told some of the 23 firms under investigation for widespread mis-selling that a guilty plea would lead to less publicity being given to their case.

In a paper seen by the Independent, instead of an announcement being made specifically about the individual firm, Imro says it would wait until several companies admit their guilt before publishing their names at the same time.

The alternative, Imro says, would be to go through normal procedures, including a hearing before a disciplinary tribunal: "However, in such circumstances, Imro would make no concessions concerning the timing of publication of the results of the tribunal hearing."

The document is being given to Imro members at meetings to discuss the investigations into more than 60,000 pension transfers carried out by their financial advice arms. Firms are told they can also choose to defer the date of any eventual penalty to give themselves time to put their house in order.

Imro's new stance flies against previous statements made by financial regulators, that negative publicity is a more effective punishment and a deterrent against potential wrong-doers than a fine.

However, some experts claimed yesterday that Imro's stance is also based on the fact that it is finding it difficult to prove some of its members guilty.

One source close to the negotiations between the watchdog and companies under investigation, said: "The investigations over pensions mis-selling appear to have stalled.

He added: "The message appears to be if that you plead guilty, even where you don't necessarily believe you were, Imro will go easier on you than if you decide to go through the full procedure.

"This also appears to be motivated by political considerations. Imro appears to be determined to make an impact as an organisation that can crack down hard on those guilty of mis-selling. But to do that you need to secure a few convictions. This is aimed at achieving them."

Imro said yesterday that it could not comment on the leaked document but that its determination to clamp down on rule breaches, including mis- selling pension pensions, was unchanged.