IMRO threat to 23 firms

Willis Corroon and Sedgwick Noble Lowndes, two leading financial institutions, are under investigation by Imro, the fund management watchdog, over the pensions transfer scandal.

Both companies' financial services arms are among 23 past and present members of Imro now facing possible disciplinary action, including heavy fines, for their role in the affair.

Others believed to be under investigation include Alexander Clay & Partners, the actuaries, and Godwins, a national firm of independent financial advisers.

The companies, thought to have carried out tens of thousands of pension transfer cases between them, have instructed several top City legal firms to represent them in their battle with Imro. Among the lawyers believed to have been retained by the threatened firms are Linklaters & Paines and Cameron Markby Hewitt, which have both acted on behalf of financial services institutions to be fined on earlier occasions.

The firms under investigation were among many which carried out financial services business while regulated by Imro until early last year. Thereafter they joined another regulator, the Personal Investment Authority.

Several of those under investigation are complaining that the watchdog's threat to discipline them contrasts with a softer position so far taken by the PIA. They are also understood to have appealed to the Treasury for help to avoid heavy fines.

A spokesman for Willis Corroon confirmed that his company was helping Imro's investigation. Sedgwick refused to comment.