Briefings
Mishcon Fraud Watch
Banking & Finance
Fraud: Claimant
Fraud: Defendant
Insolvency and Recoveries
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| July 2008 |
Welcome to the July edition of Mishcon Fraud Watch, prepared by the Fraud & Insolvency Group at Mishcon de Reya. Its aim is to provide businesses and their advisors with a snapshot of what has been happening in the world of fraud in the last month.
We make no judgment whatsoever as to the morality, legality or appropriateness of the conduct which forms the subject matter of this bulletin. We simply aim to bring these matters to the attention of those involved in the prevention, detection and investigation of fraud.
United Kingdom
Banking and Finance
KPMG has been fined £495k and ordered to pay £1.15m in costs to the Joint Disciplinary Scheme for its role as auditor to Independent Insurance, which collapsed in 2001 following an accounting fraud.
Financial Times, 26 June 2008
Food and Beverages
An internal audit has found that a former financial controller at Campsie Spring, a mineral water company, deliberately hid costs of up to £20m in an accountancy fraud.
Daily Mail, 26 June 2008
Serious Fraud Office (SFO)
A report by Jessica de Grazia, calls for reforms of the SFO to help speed up cases. The report was commissioned by Robert Wardle, the former SFO Director, and Lord Goldsmith, the former Attorney General.
Review of the Serious Fraud Office: Final Report, June 2008
The SFO has dropped plans to prosecute an employee of a UK company working abroad. The move follows an investigation by the SFO into alleged corruption involving Energy Trading Finance Team, a London-based company operating in Eastern Europe.
Financial Times, 3 June 2008
Serious Organised Crime Agency (SOCA)
SOCA has executed search warrants at four addresses in Somerset in connection with a suspected international sweepstake and lottery scam worth £25m.
SOCA press release, 13 June 2008
North America
Insurance
Integro, a New York insurance broker, and Amber Partners, a risk-rating agency, have launched an insurance product for hedge fund investors. The product offers cover against hedge fund assets being frozen by regulators.
Financial Times, 30 June 2008
Banking and Finance
Civil fraud charges have been filed against UBS in Massachusetts. The bank is accused of selling unsafe auction-rate securities to investors.
Financial Times, 27 June 2008
Ralph Cioffi and Matthew Tannin, Bear Stearns' executives, have been arrested in New York on charges of fraud in connection with the collapse of two hedge funds, which invested heavily in the sub-prime mortgage market. Both men deny any wrongdoing.
The Guardian, 20 June 2008
Asia
Banking and Finance
Four people have been arrested in connection with an ongoing investigation into alleged financial fraud in Japan. The four have been charged with defrauding Lehman Brothers in a complex fraud involving financial products, which they claimed were backed by Marubeni, a Japanese trading company. Marubeni deny any wrongdoing or knowledge of the scam.
Financial Times, 17 June 2008
Mishcon de Reya
Mishcon's Fraud Watch is published by the Fraud & Insolvency Group of Mishcon de Reya Solicitors. Widely recognised as the leader in the field of fraud investigations, the Group has pioneered the use of financial fraud techniques in numerous fields, including the rapidly growing areas of theft of confidential information and counterfeiting. The Group founded and run both the Asset Protection & Recovery Network, made up of international legal fraud specialists and the Financial Fraud Group, for risk and compliance officers.