27 JUNE 1987, Page 25

Scot-free swindlers

THE City's bold gendarmes are every- where these days, running in or running after the little boys who do no harm (or not much), and leaving the big professional swindlers at large. Until now the gen- darmes, in their defence, have pleaded poverty — the Fraud Squad had to think twice before budgeting to use the photo- copier. Now, though, there seem to be all the resources to go chasing after people who have applied for British Airways or Tie Rack in the name of their cat (illegal) rather than their aunt (legal). Besides the cat-hunt we have the insider-hunt. Accountants and Queen's Counsel — and heaven knows which are the more expen- sive — are investigating half a dozen suspects. Meanwhile, the biggest and most disgraceful frauds in the modern City, involving between £55 and £80 million, go untouched by the law. These were, of course, committed by professionals in Lloyd's at the expense of the members. No one has been charged with them — not, that is, by the Director of Public Prosecu- tions. Lloyd's has pressed its own internal charges. Its disciplinary actions have been taken against 47 defendants, ten of whom have been expelled, twelve suspended and four fined. The charges did not stop short of three members of the old ruling Com- mittee, including the chairman, and the fines ran into seven figures. All of these proceedings were subject to the standards of proof required in criminal trials. Lloyd's first chief executive, Ian Hay Davison, stresses in his new book, A View of the Room, that Lloyd's passed all its evidence to the prosecuting (or rather, non- prosecuting) authorities: 'The contrast with the promptness with which the au- thorities have pursued those accused of

insider dealing in securities at the end of 1986 is striking. . . . There must be some- thing wrong with a system of criminal justice in which a shoplifter goes to jail for petty theft and a City fraudster, who may have stolen millions, gets off scot-free.'