Investment regulator Imro has said that the four Deutsche Morgan Grenfell asset management directors suspended from working in the City, following the Peter Young scandal, could have requested that Imro pay their legal fees.
Imro suspended the four directors – Graham Kane, Glyn Owen, Michael Wheatley and Paul Ebling – for failing to prevent Peter Young's “highly irregular investment activities”. Each has to pay Imro's investigation costs of about £90,000.
Their legal costs, paid by Morgan Grenfell, are believed to be at least £200,000 each. But they reportedly feared that Morgan Grenfell would stop funding them if they went to tribunal.
Some of the directors have publicly complained that they were forced to settle because they could not afford the legal costs of challenging Imro's investigation at tribunal.
The investigation was handled by a team from Dibb Lupton Alsop, headed by partners Peter Bibby and Neil Micklethwaite, and a team of forensic accountants from Arthur Andersen, led by partner Clive Bouch. Imro had also instructed Barbara Dohmann QC and Jaban Herberg as counsel.
An Imro spokeswoman said: “If any of the directors had been unhappy with the process they could have made their complaints known to us.”
But they had not, she said. She said Imro always asks people it is investigating if they have a problem with legal costs. If they do, Imro can agree to pay a proportion of these costs.
If they had wanted to go to a tribunal, she said, the directors could have represented themselves and Imro would have adjusted its own level of legal representation accordingly.
She also denied reports that only one of the four had been interviewed before the settlement. She said that compliance officer Paul Ebling was interviewed early on but that all the other directors were interviewed once sufficient evidence was obtained.