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Money managers under the microscope

from Reuters Investigates:

Morbid money-spinners

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If the life settlements market seems ghoulish, here’s a British scandal which isn’t doing the image of the business any favours. It’s one of the worst the country’s seen.

Around 30,000 mainly elderly investors in the UK put their money into a company called Keydata, hoping to make a little extra cash to fund their own retirement with the promise of a healthy return.

What they were buying sounded kosher, even if it did depend on how fast their wealthy American counterparts were dying. Of course, the investors may not have known that.

As is so often the case with these things, the projections were a little optimistic. And then some other irregularities blew up. Around 100 million pounds went missing, one of the business’s partners dropped dead in Singapore and the investment company was shut down by the regulators, leaving British pensioners like Tony and Pam Tobin out of pocket.  The Serious Fraud Office is investigating.

SFO probes Dynamic Decisions

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Most investigations into hedge fund fraud or other wrongdoing during the credit crisis have been based in the U.S., but there are signs that, despite its well-regarded framework of hedge fund managers regulation, London is seeing some activity too.

rtr26mbdToday the Serious Fraud Office announced it had opened a criminal investigation into Dynamic Decisions’ Growth Premium Master fund after a referral by the FSA and a number of complaints about the fund management firm.

Fraud – a booming business

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Fraud is booming as financial pressures rise during the recession, according to PricewaterhouseCoopers, which last night hosted a meeting of its ‘Fraud Academy’, which aims to help companies share tips on spotting those up to no good.

rtr232sh“I think fraud is booming in the current downturn,” said Andrew Gordon, a partner in the forensic accounting practice.

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