High Court bars accountants over £12m fraud inquiry

Two firms of accountants that have taken at least $18m (£12m) from investors were yesterday barred by the High Court from carrying out financial services businesses and had their assets frozen pending the outcome of a Serious Fraud Office investigation into their activities.

The action was brought by the Financial Services Authority, which gave evidence to the Court that the accountants had been taking money from investors for a US dollar-based collective investment scheme without their authorisation.

The FSA was granted an interim injunction against Dobb White & Co and Morris White & Co, which both have offices in Leicester and Nottingham. The injunction also covers two partners of the firms, Shinder Singh Gangar and Alan White.

Carol Sergeant, managing director of the FSA, said: "We are not concerned with whatever accounting services these firms may provide. However, our evidence suggests that Dobb White & Co, Morris White & Co, Mr Gangar and Mr White have not confined themselves to accountancy, but have been running what appears to be an unlawful investment scheme that has probably taken in excess of $18m from the public.

"By taking court action to stop their activities and freeze their assets, the FSA, with the SFO and the police, has acted to protect the public while further investigations continue."

The Leicestershire police force is leading the inquiry on behalf of the Serious Fraud Office and the FSA will continue to investigate the firms. It is not yet known how many people may have parted with their cash to invest in the scheme. The firms are understood to have used a number of introducers to bring new investors on board. This is not the first High Court action the two firms have faced. In 1998 they were found to have breached banking laws and were ordered to stop accepting deposits from the public.

Because the firms were not authorised, investors are not covered by the Financial Services Compensation Scheme that would protect investors in an authorised firm in a similar situation. Anyone who may have invested in the scheme may send their contact details to the FSA's enforcement division.