Coopers may reveal Cantrade solution

A confidential report by Coopers & Lybrand could hold the key to a string of fraud charges surrounding the troubled Jersey bank Cantrade.

Retired Touche Ross partner Alfred Williams is due to appear before Jersey magistrates on Wednesday charged with eight counts of fraud. The allegations against Williams follow a dozen fraud charges against Cantrade Private Bank Switzerland (CI), while a senior employee Peter Stoneman faces nine charges.

The Union Bank of Switzerland subsidiary’s case will be heard on 6 December, while Stoneman is also due to appear in court on Wednesday.

The charges, all relating to ‘misleading and reckless’ statements and concealing material facts, follow ones against independent financial trader Robert Young, from Nottingham, in August.

Young, who acted on behalf of Cantrade, is alleged to have reported good investment returns for several years when he was actually making losses.

Cantrade stands accused of deliberately concealing and actively promoting Young, who is currently on police bail, despite the losses. Touche Ross, through Williams, is alleged to have audited Young’s trading figures and failed to check accurately his claimed profits.

Coopers’ Jersey office, which audits Cantrade, was asked to compile the report by the island’s financial regulatory authority, the Finance and Economics Committee, after angry investors sued Young for $27m (#17m) which they claim he lost in currency trades.

Accountancy Age revealed last month that investors had applied for a judicial review of the committee’s decision to order the Coopers report.

The committee was heavily criticised for refusing to investigate the allegations beyond the secret study. Its handling of the case has raised questions about the island’s suitability to act as a safe haven for the accountancy profession through its new limited liability partnership legislation.

Cantrade, which has suspended Stoneman until the case is resolved, plans to fight the charges but agreed to meet any claims which are ‘legally justified’.

Labour is considering eliminating the tax haven status of the Channel Islands and the Isle of Man. George Foulkes MP, who claims billions of pounds are lost each year through the islands, has tabled a Commons Question for answer this week on the Treasury’s estimated loss.