Hedge funds are in the sights of the Serious Fraud Office, following
high-level talks with accountants.
SFO chief Richard Alderman said that the high-risk, high-reward investment
companies were an area of concern and discussions with members of the profession
had added weight to doubts.
The clampdown comes alongside the high-profile collapse of the Weavering
Capital hedge fund.
Speaking at a KPMG Fraud in Business Club meeting this month, Alderman said
he was ‘particularly concerned’ about hedge funds. He added: ‘We became more and
more concerned the more people told us that this was not an area of risk.’
Since then, Alderman has been in discussion with senior accountants and
leading corporates. Jeremy Outen, partner at KPMG Forensic, was involved in the
talks and said that, while hedge funds had been discussed, the risk of fraud had
increased across the board.
‘There’s a concern that [hedge funds are] suffering in this market as much as
Fraud experts have backed Alderman’s approach. ‘We think he is spot on. We
think hedge funds are going to be a very big area for fraud,’ said Simon Bevan,
forensic partner at BDO Stoy Hayward. ‘When you say you are going to invest in
X, but it’s not an independent third party, that would be a big red flag.’
An SFO spokesman said: ‘There are a number of issues, including transparency
on what actually constitutes a hedge fund and its financial backing.’
A senior adviser to hedge funds told Accountancy Age Alderman’s
comments had left the industry operating in ‘a climate of suspicion’.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season
Baldwins Accountancy Group has continued investment in the north-east and appointed David Fish as a director in its corporate finance team