Regulations and Law

Serco Charges, Unilever Trading and DotDigital AGM

I like to report on the latest evidence of fraudulent accounting just to remind folks how little one can trust the accounts of companies. I have not mentioned Serco (SRP) previously but it is now reported that two executives of the company have been charged with fraud and false accounting by the Serious Fraud Office (SFO). The charges related to false reporting of tagging of offenders to the Ministry of Justice and the company has previously entered into a deferred prosecution agreement ...

FRC Fines Grant Thornton £650k, Ted Baker and Tullow

A ShareSoc member emailed us to give his view: This is terrible. Why wouldn’t the FRC name the partner and the company involved, especially when Grant Thornton has been responsible for so many mishaps. We attend meetings with FRC and are always assured things will be different. All that happens is new people takeover, warm the seats for a few years, take the money and move on. In the other article , the former NAO leader Sir Amyas Morse , a former PWC global ...

M&G Property Fund Closed and M&C Saatchi Accounting Problems

The really bad news yesterday for many investors was that the £2.5 billion M&G Property Portfolio Fund had been closed to redemptions. This is of course an open-ended fund where sales of units by investors causes the manager to sell some investments to realise cash to meet those redemptions. The fund holds a number of large retail shopping centres in the portfolio which must be particularly difficult to sell at the present time. The fund has seen withdrawals of over £1 ...

The Political Manifestos and their Impacts on Investors

Here are some comments on the manifestos of the major political parties, now that they are all available. I focus on how they might affect investors. Most readers will have already realised that political manifestos are about bribes to the electorate, or to put it more politely, attempts to meet their concerns and aspirations; however in this particular election, spending commitments certainly seem to be some of the most aggressive ever seen. Labour Party: The Labour manifesto includes extensive renationalisation of water/energy utility ...

Fevertree Fall, Trading Times and More on HBOS/Lloyds

Last week when I spoke at the Mello event I talked about my investment winners over the past few years. One of them was Fevertree (FEVR) but I was asked why I no longer held the shares. I gave a brief explanation at the time but there is good exposition of the issues by Phil Oakley in this week’s Investors Chronicle. Fevertree’s share price peaked at 3200p in May 2019 but it’s now about 1900p. It has declined so much in the ...

Lloyds Shareholders Lose Case

After many months of deliberation, a judge in the High Court has rejected the claims by former Lloyds TSB shareholders over the takeover of HBOS and recapitalisation of the company by the Government. That resulted in major capital losses to Lloyds Banking Group (LLOY) shareholders and suspension of the dividends which many private shareholders relied on for income. For those not familiar with the case, this stems from the events in 2008/9 when all banks came under severe financial pressure. HBOS was ...

FRC: Individual Shareholders Engagement Meeting 5 Nov 2019

This was an excellent event, well organised by the FRC with about 80 attendees from ShareSoc and the UK Shareholders' Association. It is very reassuring to hear the underlying messages now coming from the FRC. The significant change of approach on transparency is very much to be applauded. It is also clear that oversight of audit quality is receiving much more attention. Following hard on the heels of yesterday's presentation from David Rule, I was very pleased to see today's news alert, ...

Law Commission Error on Segregated Accounts

In a previous blog post on the Law Commission’s consultation on Intermediated Securities I queried their claim that all investors in nominee accounts had the option to use a segregated account (i.e. a “designated account” where your name is on the share register, not just the nominee operator’s). They claim this is mandated by an EU regulation. This is extremely important because a simple “pooled” nominee account that most stockbrokers use does not give you clear ownership of the shares. If ...

Woodford, Buffett Bot and FRC Survey

There was a very good article in the FT on Saturday on the “rise and fall of a rock star fund manager”, i.e. Neil Woodford. Essential reading for those who...

Woodford and Hargreaves Lansdown

To follow up on my previous blog post over the collapse of Woodford Investment Management and how to avoid dud managers, the focus has now turned in the national media upon Hargreaves Lansdown (HL.). Investors who have lost a lot of money, and now won’t be able to get their remaining cash out for some time, are looking for who to blame. Neil Woodford is one of course, but what about investment platforms such HL? The Woodford Equity Income Fund was on ...