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Fraud Updates 2009
18 February
The news that Sir Robert Stanford is being investigated for allegedly perpetrating yet another Ponzi scheme is further illustration, if one is needed, of the fact that many investigations of this nature will erupt during this recession..
It appears that the investigation has been ongoing for some time but it is reported to bear a number of similarities to the charges that have been brought against Mr Madoff; namely consistent rates of return that are market beating. The central allegation again appears to be that Sir Robert was at the centre of an operation which raised funds from new investors attracted by high rates of interest to pay returns to existing investors; rather than generating those returns from investments. At the present time, it is unclear what sparked the investigation.
Steven Philippsohn, the senior partner of city firm, PCB Litigation, and chairman of the Commercial Fraud Lawyers Association, said:.
"This is the tip of what is threatening to be a very large iceberg and yet another early example of the news that we are going to get very used to hearing during this recession. As the credit crunch bites, more and more problems will come to light. The problem in respect of any fraud is that the knock on effect will be ruinous. The fallout from the charges made against Mr Madoff shows how investors across the world have lost substantial sums of money..
In deciding the most effective way of recovering losses, victims need to consider the nature an accuracy of the information provided, the duties owed by the agents who introduced the investment opportunity and the remedies that are available in the countries in which claims could be brought. The case again highlights the need for effective controls and effective deterrents. Where fraud is involved, there is an immediate need to identify and attach assets of accountable parties. This includes not only the fraudster but also those who allowed it to happen such as those who misrepresented and missold the investment. .
A further issue will be whether investors who have lost money have claims against other parties who have received their monies."
| April 2010 | December 2008 |