The Daily Mail today on its front page tells of a probe by the SFO into "The Biggest Ever Fraud" which is "likely to be even more explosive than the Guinness affair in the 1980s."

It refers to the collapse of the Icelandic bank Kaupthing, and the arrest on Wednesday of the Tehenguiz brothers.

The probe "will focus on how some major depositors in Kaupthing were able to withdraw their money just before the bank collapsed, leaving millions of other investors out of pocket"

But surely, THIS IS JUST WHAT HAPPENED AT THE EQUITABLE.

Many have wondered on this board What was it about Equitable that made it so different? Some reckon it was over-bonusing. Others say it was the GAR/HoL issue. Some say it was the Reinsurance Treaty.

Very little attention however has been paid to what happened between closure in December 2000 and the 16% cuts in July 2001. During that time

(a) Politically sensitive Schemes, such as the public service NHS AVC Scheme, were smuggled out of the Equitable in advance of the cuts known to be imminent, and with low MVAs to boot

(b) Individuals were allowed to invest new premiums (to which the 16% cuts did not apply, a fact again no doubt known in advance) which attracted the GAR uplift; including premiums on lapsed policies. All examples of insider trading.

Surely for this reason alone Equitable too should be held up as a scandal on a par with the Guinness affair?

matt

matt404: "Surely for this reason alone Equitable too should be held up as a scandal on a par with the Guinness affair?"

Of course, but EMAG has so far shown no inclination to explain this to the general public, or even to its own members, let alone the media.

matt404: "Surely for this reason alone Equitable too should be held up as a scandal on a par with the Guinness affair?"

OTM: "Of course, but EMAG has so far shown no inclination to explain this to the general public, or even to its own members, let alone the media."

The basic problem, which has stymied anyone - not just EMAG - following this line of thought and supposition, is that there is absolutely no hard evidence in the public domain to support the claim that anyone, be they individuals or group members, benefited knowingly and improperly in collusion with management.

(Arranging the departure of a group scheme on better than average terms is surely not illegal, or even improper - it's the trustees' job to do the best for their members).

So any "explanation" based solely on "They could have done that, couldn't they" without a shred of hard evidence sounds very feeble and is very unlikely to attract the interest of the media. As for Equitable investors, any of them who has followed this saga will know that Lord Penrose submitted a file to the Serious Fraud Office, which the latter eventually set aside, apparently without investigation.

We may all surmise, but - absent helpful moles - none of us has been able to go further.

If you know of any hard evidence, my apologies, and please direct us and the SFO to it.

Incidentally, if fraud by Equitable directors and employees - civil or criminal - were proved who would pay the damages ? Who else but Equitable ?

http://www.ifaonline.co.uk/ifaonline/news/2033315/sfo-forced...

The Serious Fraud Office (SFO) has been instructed to release potentially sensitive documents about the downfall of Equitable Life following a Freedom of Information (FOI) request.

In a detailed letter, the Information Commissioner (IC) rules the SFO must release a vetting note explaining why it refused to carry out a criminal investigation into the insurer's conduct.

The SFO had claimed that releasing the information would prejudice its ability to conduct effective investigations and potential prosecutions.

No such prosecutions have taken place for over a decade, however.

Following the FOI request, the letter says the Commissioner found "some information was incorrectly withheld" by the SFO.
The Fraud Office has 35 days from the date of the ruling, 3 March, to comply with the IC's decision and release the vetting note.

The note relates to the SFO's preliminary investigation into Equitable Life in 2004, which it closed a year later after the Fraud Office decided no criminal investigation into the insurer's collapse was needed.

In December 2005, the SFO said: "Following careful consideration of the available evidence, the SFO confirms nothing has emerged which would justify a full criminal investigation in to the affairs of the Equitable Life Assurance Society."

It is not yet known who submitted the FOI request.

Paul Braithwaite, general secretary of the Equitable Members Action Group (EMAG), says:

"There are policyholders out there who believe there was a conspiracy between the regulators and Equitable Life.

"I believe there is a difference between criminal fraud and a looser definition of fraud; I do not believe anyone siphoned off money here.

"But I do think there was a conspiracy of silence between the regulators and Equitable Life."

The 22 page letter can be found here:-

http://www.ico.gov.uk/~/media/documents/decisionnotices/2011...

OTM: "Of course, but EMAG has so far shown no inclination to explain this to the general public, or even to its own members, let alone the media."

Fraud and the proving thereof is but one part of this tale - the early history of Equitable and the Ponzi scheme, it's effective insolvency before the majority of us had ever invested - has never been told in accessible book form. There is much valuable information in Penrose, the Institute of Actuaries in their proceedings against Ransom etc which is in the public domain but these has never been distilled in a form that the general public could understand and thus appreciate the overriding message i.e. that the political and financial elite is not to be trusted and will always hide its failings and protect its position in every way possible over years and decades

EMAG could have performed a valuable role in detailing the whole truth in book form - press articles, valuable though they have been, could only scratch the surface of thirty years of scandal - but EMAG has decided that it will not get involved in such a project

In the absence of any other strategy and the impossibility of increasing the compensation pot what is to be lost by telling the truth now?

We can hardly blame the public for not appreciating the scandal which has taken place when there has been no book to refer to beyond a chapter from Alex Brummer

100MEL:

Fraud and the proving thereof is but one part of this tale - the early history of Equitable and the Ponzi scheme, it's effective insolvency before the majority of us had ever invested - has never been told in accessible book form. There is much valuable information in Penrose, the Institute of Actuaries in their proceedings against Ransom etc which is in the public domain but these has never been distilled in a form that the general public could understand and thus appreciate the overriding message i.e. that the political and financial elite is not to be trusted and will always hide its failings and protect its position in every way possible over years and decades

Um . . . personally I think that a good proprtion of the population have known this all their lives and the main thing puzzling them is how anyone could have thought different.

Colin

Author: hectorajg | Date: 12/03/2011 10:28:39 | Number: 87331

Thank you for your post re the Serious Fraud Squad and a Freedom of Information request by the Freedom of Information Commisioner.

1/ The Serious Fraud Office (SFO) has been instructed to release potentially sensitive documents about the downfall of Equitable Life following a Freedom of Information (FOI) request.

It is not yet known who submitted the FOI request.

How come Paul Braithwaite is not claiming the credit for this request?

2/ Paul Braithwaite, general secretary of the Equitable Members Action Group (EMAG), says:

"I do not believe anyone siphoned off money here."

Is Paul Braithwaite going to say he was mis-quoted?

"In the absence of any other strategy and the impossibility of increasing the compensation pot what is to be lost by telling the truth now?

We can hardly blame the public for not appreciating the scandal which has taken place when there has been no book to refer to beyond a chapter from Alex Brummer"

-------------------------------------------------------------------------------------
I repeat "How about setting the record straight on YouTube and Twitter?"

These are today's channels for getting a message across, rather than the traditional media. If there is to be no book, perhaps EMAG might consider this route?

I repeat "How about setting the record straight on YouTube and Twitter?"

These are today's channels for getting a message across, rather than the traditional media. If there is to be no book, perhaps EMAG might consider this route?


Twitter is limited, I'm told, to 140 words per tweet (or twit). Would you care to compose a 140 word message that distills the essence of our evidence of malpractice ?

Producing a clip or three for YouTube does not guarantee an audience bigger than the long-shrunken (I suspect) readership of this board. There are masses of YouTube clips with tiny viewing figures. How many thousands of viewers would there be, do you think, interested in the decades-old problems of a mutual assurance company ?

As for a book, it would be a great idea if we had some hard evidence of malpractice or rule-breaking, beyond that already revealed by the PO, Lord P and the Inst of Actuaries. Trouble is, even their reports are - for any reader but the most determined - dry as dust. No point in writing a book - especially if someone has to be paid to write it - if it ain't read.

Matt 4004,
re your post 87323
"a) Politically sensitive Schemes, such as the public service NHS AVC Scheme, were smuggled out of the Equitable in advance of the cuts known to be imminent, and with low MVAs to boot"

Here is your "starter for ten"
May 1998: PIA & PIAO moved staff pension-fund management out of ELAS and on 1st June 1998 had metamorphosed into FSA/FSO with little or no exposure to the fortunes of ELAS.This beats your start-date by two years! "Insider dealing" you might think but "I couldn't possibly comment!"
On the subsequent "favoured" exodus by various government and para-governmental departments , surely ELAS has records of this and could provide a calendar of dates of departure with attached sums involved and attached penalties (if any). Can anyone provide a valid reason why such information should not be put in the public domain.

In passing , not all NHS AVCs missed the chop. My wife's AVC fund took the 16% hit.. Mind you that was with the Scottish NHS pension scheme which we have found NOT to be a model of up-to-date , bleeding edge efficiency!

Colin Townsend: " the political and financial elite is not to be trusted and will always hide its failings and protect its position in every way possible over years and decades

Um . . . personally I think that a good proprtion of the population have known this all their lives and the main thing puzzling them is how anyone could have thought different."

In general terms yes. I believe the vast majority of the population now believe - with good reason - that in principle we are routinely lied to or fed half-truths by those in power over us.

That is different, though, from providing that same population with hard, incontrovertible evidence, backed up by chapter and verse and personal heartbreaking witness, of a specific fraud, perpetrated upon tens of thousands of people for years which, since its discovery a decade ago, has been the subject of ongoing and increasingly convoluted measures by Government to distort the facts and to hide the truth from the electorate.

We do indeed need a book on the subject to be published, a book in readable and popular form, that would concentrate on the essentials. These are very simple. The oldest Lifeco in the UK, one that trusted to its reputation to suck in people's savings year after year, was in fact cooking the books whilst operating under the umbrella of Government regulation. It indulged in extremely creative accounting and was running a pyramid selling scheme (everyone know what they are) in order to pay pensions as they became due, leaving nothing in the kitty for payouts to those who were still saving. Some older savers were given preferential terms that other younger savers were unaware of. The Gvt. Regulators were either so neglectful of their duty that they failed to notice this, or they did notice it but chose to look the other way, making them complicit in a fraud. Running a Ponzi sewlling scheme is a crtiminal offence. Either way they bear liability. Running a Ponzi selling scheme is a criminal offence but the Regulators have refused to take action against the Directors of ELAS who ripped people off with one. When all this was discovered, the Government moved in with lightning speed to deny, to obfuscate, to cloud the issue with several lengthy and very expensive Enquiries, to cast blame in every direction bar that where it truly lay - their own Regulators.

As a consequence of all this, tens of thousands of the UK's retired population have lost much of their pensions and all their security in old age. Some have already died in hardship. Others will die before much longer. What ELAS stole, what all these people lost, was not investments in the sense in which this term is popularly understood. These people were not having a punt on the Markets in order to make a quick buck. What was stolen was people's SAVINGS for their old age. THAT is what makes the entire ELAS affair so deplorable. THAT is what needs to be told, along with a VERY strong warning to anyone currently saving for a pension. "It happened to us, nothing has changed, it could happen to you."

Simples, yes?

Author: hectorajg | Date: 12/03/2011 10:28:39 | Number: 87338

http://www.ico.gov.uk/~/media/documents/decisionnotices/2011...

20.
Following further correspondence and telephone calls, on 14 December 2010 the Commissioner issued the SFO with an Information Notice in accordance with his powers under section 51 of the Act. By way of this Notice, the Commissioner required the SFO to furnish him with further information about this complaint. In particular, he required the SFO to respond regarding key pieces of information that fall within the scope of the request. The Commissioner was particularly concerned that key other documents referenced in withheld information previously supplied by the SFO had not been located. This included the Vetting Note.

21.
The Chief Executive of the SFO responded on 13 January 2011. In response to questions in the Information Notice about key pieces of information, she provided the Commissioner with a copy of the Vetting Note and explained that the SFO had searched extensively and were unable to locate the other legal advice documents the ICO had asked about. The Commissioner notes that it was only as a result of his persistence and the exercising of his powers under section 51 of the Act that this important information came to light. The SFO confirmed it was applying the exemption in section 30(1)(a) to this information.

36.
The SFO told the complainant that it was withholding the requested information on the basis that it is held for the purposes of an investigation it has a duty to conduct. However, arguing in favour of disclosing the information, the complainant told the Commissioner:

“But Equitable Life closed to new business in December 2000. So the SFO has had ample time, that is ten years, to conduct such an investigation and has not done so”.

37.
The complainant argued that, in his view, it was unreasonable for the SFO not to disclose information on the grounds that this would prejudice a future prosecution:

“where there have been no such prosecutions for ten years, and it has apparently no intention of ever prosecuting, and has not even started a ‘full criminal investigation’. Such prevarication is surely not in the public interest”.

44.
On its website, the SFO states:
“Our aim is to protect society from extensive, deliberate criminal deception which could threaten public confidence in the financial system. We investigate fraud and corruption that requires our investigative expertise and special powers to obtain and assess evidence to successfully prosecute fraudsters, freeze assets and compensate victims”.

45.
The Commissioner asked the SFO to clarify its powers, as described on its website, with respect to prosecuting fraudsters, freezing assets and compensating victims. He also asked it to explain how an investigation of the type the SFO has the power to conduct would have assisted members of the public affected by the collapse of Equitable Life had the decision to conduct such an investigation been taken.

46.
In reply, the SFO told him:
“We can only reply hypothetically. Had we decided to investigate the case, it may have lead to a prosecution which, in turn, may have resulted in a conviction, depending on the court’s decision. The issue of compensation is a matter for the criminal courts. Prosecutors may invite the judge to make an order. However, we are unable to determine, on the information available, whether an order could have been applied for/made by the court and any possible amount.”

47.
In the circumstances, and given the magnitude of loss to policyholders, the Commissioner considers it is justifiable to include this factor when considering the public interest in favour of disclosure.

Hector, thanks very much for posting. I look forward to the next instalment....

10to20

Hector, thanks very much for posting. I look forward to the next instalment....

You should not thank me at all, but the complainant should be thanked profusely.

What he/she will get is the Vetting Note:-

http://www.sfo.gov.uk/media/103080/referral%20and%20evaluati...

The vetting note will include the following matters:

• The nature of the allegations made;

• The evidence submitted in support of the referral;

• Any potential difficulties in pursuing the investigation or a prosecution that the evidence discloses;

• A consideration of the alleged facts by reference to the SFO acceptance criteria;

• A recommendation whether the case should be accepted or rejected;

• The reasons for that recommendation.

Whether this takes the complainant any further remains to be seen; as does whether he /she can put the vetting note into the public domain.

Author: hectorajg | Date: 13/03/2011 07:45:49 | Number: 87341

You should not thank me at all, but the complainant should be thanked profusely.

Quite so. If the complainant lurks on this board, then thank you!

Whether this takes the complainant any further remains to be seen; as does whether he /she can put the vetting note into the public domain.

In other words there is the possibility that, even when/if the information is released, all other persons wishing to know the 'nature of the allegations made' and the 'evidence submitted' etc might have to make their own FOI application. Interesting.

10to20

"You should not thank me at all, but the complainant should be thanked profusely."

"Quite so. If the complainant lurks on this board, then thank you!"

Yes indeed. This looks like a major breach in the enemy's defences. Fingers crossed...

Might also help EMAG's approach via Parliament...

Abdiel

angerberry:

Simples, yes?

Well . . . . Yes and No.

You don’t have to convince me that some Equitable Life policyholders have been shamefully treated.

On the other hand my point is the half the flippin’ country is despairing or apoplectic ( or both ) about the state of their pension or lack of it, and while you have every right to be indignant about the treatment of WPAs I doubt that the ‘general public’ have much interest in the detail of what went on and I have personally experienced quite a few expressions of open hostility to the idea that there should be any taxpayer funded compensation going back more or less to the start of the whole shambles.

In understanding this I think it is worth keeping in mind that a fairly substantial segment of the population have no savings at all and increasing numbers of middle aged people are approaching retirement with substantial debts as reported only in yesterday’s paper:
http://www.guardian.co.uk/money/2011/mar/09/pensioners-will-...

Just my 2p worth.

Colin

100MEL: "EMAG could have performed a valuable role in detailing the whole truth in book form - press articles, valuable though they have been, could only scratch the surface of thirty years of scandal - but EMAG has decided that it will not get involved in such a project

"In the absence of any other strategy and the impossibility of increasing the compensation pot what is to be lost by telling the truth now?

"We can hardly blame the public for not appreciating the scandal which has taken place when there has been no book to refer to beyond a chapter from Alex."

Setting the whole story down on paper in an orderly, disciplined fashion would perhaps have focused the minds of the EMAG committee members so that they would not have been seduced into accepting the authorities' interpretation of events.

What seems to have emerged on this board in the past few weeks is that EMAG completely disarmed itself by seeking to represent ALL the Equitable policyholders. This has included the militant GARs who completely ignored the concept of mutuality and destroyed the society by insisting on their demands despite the fact that the society could not afford to pay the unaffordable guarantees which had been given to them when the only way to meet these demands was for non-GAR policyholders in the same fund to be robbed of part of their life savings. As a result EMAG was unable to challenge the HoL's endorsement of the Ponzi fraud in which Equitable had been engaged. Similarly, EMAG was forced to support the Compromise Deal which, again, gave unfair advantage to the GARs over the innocent non-GARs whose contracts had not failed but who were illegally lumped together with the GARs in the same WP fund.

In more recent times EMAG is supporting those Equitable policyholders who have already received compensation via secret payoffs under gagging orders but who nonetheless want to receive compensation all over again out of the very limited common fund which is being made available by the Government.

Due to these clear conflicts of interest, EMAG will never be able the tell true story of the Equitable scandal which means that over the past 11 years the general public still hasn't the foggiest idea of what the scandal is all about and the authorities have been able to manipulate the Equitable victims like puppets.

Matt
I believe that in the period from December 2000 and the cuts, another set of people were taken out, ie the Lords and very likely also the MPs who were in Equitable, the very people who sign pledges and make declarations of full support they never intend to keep.
One law for ......., and keep the rabble down.
Regards
coq1