On the money with Gavin Hinks

Last week it emerged he had used expert accountants to determine that hedge funds must be targeted.

And, for the first-time ever, the SFO used paid-for advertising to tell accountants, and other professionals, they should report their suspicions or face tricky conversations with investigators about why they haven’t come forward.

Alderman has therefore gone full-tilt at switching the SFO’s stance from being reactive to proactive. This must be a cultural shock at the SFO. But Alderman clearly wants to scare up a reaction and see what he gets. As a former SFO staffer explained to me last week, what the SFO wants is to get hold of cases early, not when they are already one or two years old, with the trail already turning distinctly chilly.

The hedge fund industry unfortunately finds itself bearing the early brunt of this change in tack, but a quick look across the Atlantic should be enough to demonstrate why.

Just remember the criticism heaped on the authorities there for not acting on reports about Bernie Madoff’s vast fraudulent investment scheme and you can see why UK counterparts would want to avoid coming a cropper like that.

Moreover, Madoff has also given a steer on the industry sector to be suspicious of ­ hedge funds. Of course they are not all fraudulent, but by their very nature (to put it another way, their almost complete lack of transparency) they can be a fraudster’s dream come true.

But they need experts to do the deed and there are no skills better than an accountant’s. And that’s why Alderman has set his sights on hedge funds and accountants.

As the recession goes on, I think we can expect to hear much more of Mr Alderman.

Gavin Hinks is the editor of Accountancy Age