View from City Road: Levitt sentence weakens regulators

The fraud to which Roger Levitt pleaded guilty could have sent him to prison for up to seven years. The judge thought his offence should be compared with a lesser crime carrying a sentence of up to two years.

The actual sentence risks making a laughing stock of the Serious Fraud Office and Fimbra, which earlier this week was crowing that Levitt's decision to change his plea to guilty was a great success for City regulation.

No common sense investor will buy that claim any more, after such a light sentence for somebody who admitted fraudulently misleading Fimbra over pounds 20.7m of fees claimed to have been received, but which in fact did not exist.

The result will reinforce the popular perception that white collar crime committed by people with lots of respectable friends is somehow not terribly serious.

But the SFO and Fimbra should not be blamed. The responsibility for sentencing lies with the judge and he could, if he had thought fit, have gone much further.

The outcome confirms the wisdom of calls for a move to formal plea bargaining for fraud cases, involving prosecutors, defendants and - where appropriate - City regulators.

At the moment, the prosecution may be involved in informal negotiations over dropping some charges in return for a plea of guilty, but cannot say what it thinks about sentencing.

As for Levitt and his colleague Mark Reed, perhaps their community service should be at Fimbra, advising the regulators on how to catch others who deceive them.