SFO must explain failure to probe Equitable collapse
The Serious Fraud Office has been ordered to justify its decision not to pursue an investigation into collapsed insurer Equitable Life following a freedom of information request from an angry policyholder.
Decision: SFO looked into insurer in 2004 but decided not proceed with an investigation
The Information Commissioner's Office - an independent body set up to protect the public's right to data - has instructed the SFO to release a 'vetting note' setting out why it refused to carry out a criminal probe into the conduct of the insurer's former management.
The SFO looked into the insurer in March 2004 after the publication of a report into its downfall by Lord Penrose but in December 2005 announced it had decided not to proceed with an investigation.
The commissioner's order to publish the information behind that decision follows a request from Equitable victim Stephen Wynn from Brighton.
In a detailed 22-page letter, the commissioner said some information had been 'incorrectly withheld' by the SFO and that the organisation had kept faulty records relating to the Equitable case.
Phillippa Williamson, the SFO's chief executive, said that despite an extensive search she was unable to locate various legal advice documents the commissioner had inquired about, and acknowledged that errors existed in record-keeping.
She added that steps are being taken to improve systems.
Paul Braithwaite of the Equitable Members Action Group, said: 'I think it was a cynical act by the Treasury to park it at the SFO where it sat for more than a year. I don't believe for a moment it was properly investigated.
'I think the conclusion is very obvious that the SFO have good reason to seek to conceal their behaviour. It is shocking but typical that documents have gone missing.'
The Equitable revelations are a fresh embarrassment for the SFO, which was heavily criticised for dropping its inquiry into allegations of corruption at arms manufacturer BAE Systems.
It argued that releasing the Equitable information could affect its ability to conduct a potential prosecution even though no moves have been made to do so for more than seven years.
Officials at the SFO have 35 days from the date of the ruling on March 3 to comply or risk being found in contempt of court.
The commissioner also highlighted concerns including 'some difficulty in confirming the scope of the withheld information' and noted that some of the information given to him 'does not appear to relate to Equitable Life'.
The SFO is considering whether to appeal.
2000 Equitable loses to new business
2001 Baird report finds FSA failed to spot key problems
2004 Penrose report accuses management of 'dubious' practices
2005 SFO announces it is not opening an investigation
2008 Ombudsman says government should compensate victims
2010 George Osborne announces compensation of £1.5bn will be paid
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