UK

The work of the Serious Fraud Office in reducing financial crime could be improved if ‘recklessness’ was introduced as an offence, the investigator’s outgoing director has said.

Richard Alderman said a crime of recklessness would have to show an individual had the necessary knowledge and intent of pursuing a course of action, despite knowing the risks attached to this.

He said: “The public does not understand why it is that enforcement authorities such as the SFO have been unable to take action against senior financial people. They contrast the SFO with the US system.”
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The SFO presided over several high-profile cases during 2011 including the start of an investigation into the collapse of the Kaupthing Banking Group ...

"LABOUR leader Ed Miliband is demanding the UK government forces the Isle of Man, Jersey and Guernsey to reveal the identity of British tax evaders with money ‘hidden’ in the islands, it’s being reported today (Sunday).

Miliband, under fire over a lack of strength in his leadership of the opposition party, is said to be preparing to call this week for negotiations to begin and will demand ministers follow up the talks with a threat to put the islands on the Organisation for Economic Co-operation and Development blacklist.

He claims the move could raise £2.4 billion for the UK exchequer."

See also BBC report and video here: http://www.bbc.co.uk/news/world-europe-isle-of-man-16578469

By Tony Shearer, former chief executive of Singer & Friedlander

The report states: “The FSA’s overall pre-crisis supervisory approach was inadequate with, in retrospect, an overly reactive approach and insufficient data available to supervisors to assess prudential risks fully.”

So Hector Sants, chief executive, had no idea that the whole of the FSA’s approach was flawed.

This is precisely the warning I gave to Callum McCarthy, then chairman of the FSA, in March 2005. Back then I invited him to visit Singer & Friedlander to see at first hand how the FSA regulated what I called “trivia and minutiae” and paid no regard to the possibility of “systemic failure of the banks” (which was one of only two of the FSA’s objectives).

This week the Bank of England said it had “every confidence in Hector Sants” and looked “forward to him joining us as deputy Governor in 2013”. Even today the Bank of England has no idea what happened and what the FSA is supposed to be doing. They are not the right people to regulate the banks.

Given that RBS is only one of the FSA’s failings, when will the FSA publish its reports into its failure to regulate other banks such as Kaupthing Singer & Friedlander (where depositors have lost money) and HBOS? ....

MONEY which councils invested in Icelandic banks which then collapsed during the credit crunch is pouring back into authority coffers.

And individual savers who saw millions of pounds frozen by Iceland's financial collapse are also seeing far higher returns than had been feared.

Yesterday, a ruling in the country's supreme court led to East Staffordshire Borough Council announcing that it expected to get back "almost all" of the money it invested in Landsbanki.

Amber Valley Borough Council revealed it had already received 73% of the £1 million it had invested in Kaupthing.

And investors whose accounts were passed from a Derbyshire Building Society subsidiary to an offshore Icelandic bank before its collapse reported they would get much more cash back than expected.

Savers with Derbyshire Offshore were left out of pocket after the building society passed on their accounts to Icelandic bank Kaupthing, Singer and Friedlander (KSF) Isle Of Man.

Among those left panicking by the crash were Leonard and Kathleen Orton, now aged 79 and 84, of Alresford, Hampshire, who feared they would lose £190,000 of their £290,000 investment.

But Mr Orton said the future was now looking brighter. He said: "We are expecting to have had 80% back by the end of this month and 90% by 2014.

"Obviously we would prefer to get 100% with interest but you can't help but feel pleased."

Yesterday's Icelandic Supreme Court ruling means that Landsbanki, another of the collapsed banks, will give priority to UK investors when it hands back people their cash.

One of those was East Staffordshire Borough Council, which was due to see its investments mature in 2009.

Chief executive Andy O'Brien said: "This judgement means that UK authorities' claims have been recognised as deposits with priority status over other creditors' claims.

"We anticipate that our investments will be paid back first and we should recover almost all of the money we deposited with Landsbanki."

The authority also had £2million invested in Kaupthing, Singer and Fried- lander and says more than half of this has been recovered.

A spokesman for Amber Valley Borough Council said 73% of the £1 million it had invested in KSF had already been returned and that it was due to get 84%.

"Much business restructuring was necessary following the numerous bank failures and the restructuring community has been waiting several years for today’s legal clarification delivered by the Supreme Court in Kaupthing Singer & Friedlander (in administration) and in the matter of the Insolvency Act 1986 (see judgment).

The case looks directly at whether the rule established in Cherry v Boultbee back in 1839 is compatible with the Insolvency Act (1986) and whether that could be applied to a case being pursued by HSBC against Kaupthing Singer & Friedlander (KSF), which is in administration.
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Complicated stuff, but it seems the Court of Appeal overturned an earlier decision in favour of that KSFUK. Not sure I understand it, or what it might mean, if anything, for us.

UK fights bondholders to retain 'priority' status over £5bn Iceland cash
British councils and the UK bank bail-out fund will defend their right to get back the entire £5bn they lost in the Icelandic banking crash against a group of hedge funds and other creditors who claim they should get a share of the money. Bondholders owed $4bn (£2.5bn), including hedge funds Arrowgrass, GLG and Varde, are challenging the "priority" status awarded to the local councils and the bail-out scheme by one of the banks, Landsbanki, in a test case due to start on Thursday in the Supreme Court of Iceland. (Continues)

These were investors NOT depositors.
This deal was funded by the UK Treasury and the Northern Ireland Executive.
No doubt the Isle of Man government could have done a similar deal with the UK Treasury if they had desired to do so!
The political will was there to do so in N Ireland!

At long last! The tip of the "Ice"berg?

The Dutch Finance Ministry said on Thursday that Iceland, Britain and the Netherlands had reached a deal on repayment of about $5 billion owed by Iceland to the other two countries for deposits from failed bank Icesave.

Iceland will pay a fixed interest rate of 3.0 percent on the money it owes to the Netherlands, and will pay a rate of 3.3 percent on the money owed to Britain, the Dutch Finance Ministry said in a statement.