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Scotland Yard is reported to be conducting an investigation of pension sales irregularities.
Based on a report from The Globe and Mail, 05/08/98
It is reported that the directors of Sun Life Assurance Co. of Canada are targets of a year long investigation into pension sales irregularities.
Sun Life as well as British insurers Legal & General Group PLC, and Guardian Royal Exchange Assurance PLC have been named in the British press as subject of the inquiry by Scotland Yard's fraud squad.
The matter reportedly involves allegations that the companies have been selling pensions to customers without informing them that by buying pensions from these companies they were forfeiting their government and company pensions. The companies could be charged under a section of Britain's Financial Services Act, which makes it illegal to deliberately give misleading advice.
Company directors can be held responsible for the actions of their sales representatives.
Britain's Financial Services Act has provision to hold directors responsible for the actions of their sales representatives, with a maximum prison sentence of seven years.
A statement by Patricia Hewitt, British Economic Secretary, signalled that the government is treating the matter seriously.
"We have made it very clear that the individuals as well as the firms will be held responsible and particularly in the big companies. I think that is now clearly accepted. This is a responsibility that goes all the way up to the board room."
It's estimated the escalating pension-selling scandal could cost the insurance industry as much as 11 billion British Pounds.
According to British news reports an estimated 2 million people were wrongly advised to opt out of employers pensions and purchase personal pensions between 1988 and 1994.
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