11/12/2004 - EMAG lodges petition at the European Parliament
On December 8 EMAG's general secretary travelled to the European Parliament in Brussels to meet up with LibDem Treasury team MEP, Chris Huhne, to hand in EMAG's petition. The 44-page document has been many months in the making and has been masterminded by EMAG's deputy chairman Tom Lake, with an enormous contribution to the process from Leslie Seymour. Do take the time to read it. Obviously, it is written from a European perspective and hence in slightly stylised language.
The petition begs the European Commission to bring Gordon Brown and The Treasury to book and institute legal proceedings against the UK government for failing to protect citizens across Europe. About 100,000 foreign investors have also lost out with Equitable, the majority being residents elsewhere in Europe, and they will not fall within the remit of the PO's second report. THE office of the PO has confirmed that it would regard an investigation by the EU as complementary, covering different ground such as political implementation of EC directives (see letter at petition appendix). Download the EMAG petition (PDF needs Adobe Acrobat).
Read here, EMAG's press release 8 Dec.
Read the press coverage of EMAG's petition on Dec 9:
Financial Times:
"Disgruntled members of Equitable Life, the troubled mutual life assurer, have taken their fight for compensation to the European Commission.
Paul Braithwaite, the group's general secretary, said: "Policyholders feel they are in the treacle of an establishment closing ranks to deny any compensation. We are then appealing over the heads of the British establishment to get justice from Europe."
Mr Braithwaite denied the move represented a last-ditch attempt by Equitable members to try to secure compensation. "It's a second string to our bow. We are doing everything we can to help the parliamentary ombudsman's second inquiry."
Mr Braithwaite said the group would be lobbying MEPs to obtain their interest in the matter. He said that if the case were taken up, it would be at the expense of the European parliament, not Equitable policyholders - an estimated 50,000 of whom live in continental Europe. In addition, the European Commission had a wider remit than the parliamentary ombudsman.
06/12/2004 - EMAG exchange with Treasury
On 18 November EMAG wrote to Stephen Timms, financial secretary to the Treasury, to question why the litigation to protect ELAS policyholders has been dropped. EMAG has received an extremely predictable reply, dated 29 November.
06/12/2004 - EMAG's exchange with the FOS
On 17 November EMAG wrote to the FOS expressing its concern on the news that the Society had written to argue that the Service should not adjudicate on claims of mis-selling based on Lord Penrose's evidence. This, despite it being the course espoused repeatedly in Parliament by Treasury minister Ruth Kelly.
See EMAG's letter to Walter Merricks And his modest reply, dated 26 November.
Also, read the quite extraordinary, important 11 page submission from ELAS to the FOS, dated 15 November. Finally, find the actual Memorandum of Understanding (July 2002) between the FSA and the FOS alluded to.
Walter Merricks has asked for policyholders' reaction to ELAS's arguments by Dec 31. EMAG will reply.
For general background on what the FOS is doing about Equitable, go to: http://www.financial-ombudsman.org.uk/faq/equitable.htm
06/12/2004 - EMAG drops Judicial Review proceedings
The committee of EMAG is pleased to announce it has agreed terms to settle the claim for Judicial Review against the Parliamentary Ombudsman's first report (30 June, 2003). Click here to see EMAG's Press Release.
"The ombudsman's initial report into Equitable, published in July last year, disappointed policyholders by clearing the Financial Services Authority of regulatory failure, ruling out government compensation that way. She also seemed to pre-judge the Penrose report by saying that she would not reopen her investigation in the light of its findings but later changed this view after EMAG lodged its judicial review claim.
6 December '04 - Nikki Tait in Financial Times
26/11/2004 - The German ELAS action group
EMAG would like to congratulate its German counterpart, DAGEV, on its recent formal registration. It's website, with up-to-date information for the 30,000 ELAS policyholders in Germany, is at: http://www.dagev.de/
29/10/2004 - Progress of rectification schemes:
With-profits annuitant Peter Butler has prepared an update (Bulletin 4, as of 24 October 2004) and it is an alarming indictment of the treatment of annuitants by the Society and the response, or lack of, by the FSA. The views expressed are Mr Butlers and do not represent those of the EMAG committee. The link is provided for information purposes only. Click here for more information.
29/10/2004 - Equitable denies alleged 'over-bonusing'
With immaculate late timing, Equitable Life published on 27 October on its website a highly contentious paper entitled: "Factsheet. The Penrose Report: Policy Value Reductions and alleged "Over-Bonusing". Whilst being carefully crafted, it provides no new information. The central claim is that Lord Penrose was wrong and that there was no 'over-bonusing'.
The Society had the opportunity to convince Lord Penrose otherwise one year ago, when his draft report was shared with Equitable's management under the process known as Maxwellisation. Clearly, Lord P did not accept the Society's explanation then, regurgitated here, seven months after the publication of Penrose's report.
The FSA is reported to agree with the board, though it has steadfastly refused to publish its own report of July, 2004 - stating that it contains privileged counsels' opinions shared with it by ELAS. This is totally unsatisfactory behaviour from the body that's meant to be the policyholders' protectors.
The simple resolution would be for the Society to publish belatedly (and in full) the financial review of June 2001 by the then Appointed Actuary, Peter Nowell, which is believed to have precipitated the 16% across-the-board policy value reductions of 16 July, 2001. To read the new unsigned ELAS report click here.
31/08/2004 - Paul Myner's review of Governace
One of The Treasury's more sensible reactions to the Penrose report was to commission Paul Myners, chairman of Marks and Spencer, to conduct an Inquiry into the governance of mutuals. Since Equitable Life is central both to the problem and the actual cause of this study, policyholders could consider whether to make a personal submission on how to improve governance or indeed, articulate what is currently wrong. EMAG will be making a formal submission. Closing date for submissions is coming up quickly - September 17. The contact on the review is Mrs Khan on telephone: 020 7270.4485. Details of the consultation are available as a PDF file to download at:
http://www.hm-treasury.gov.uk/media/A6497/myners.pdf
17/08/2004 - The EMAG AGM Aug 5
More than 100 EMAG members turned out to attend the AGM and hear a keynote address by Dr Vincent Cable, shadow chancellor for the Liberal Democrats. Click here to read the minutes.
06/08/2004 - The accountants get serious too. Ernst and Young to face disciplinary proceedings
On Monday August 2nd the ICA announced that its thorough two year long investigation has concluded in the prospect of a disciplinary tribunal hearing. Two senior E & Y partners have until August 6th to respond to the charges. It is believed that E & Y will mount a vociferous rebuttal.
"Enst & Young yesterday insisted it would continue to defend vigorously its record as auditor to Equitable Life after it emerged that the accountancy firm is likely to face disciplinary charges for alleged "general audit failure".
The accounting profession's Joint Disciplinary Scheme has been investigating the role played by Ernst & Young at Equitable for almost two years and has recently written to the firm detailing a series of complaints it is minded to lay before a disciplinary tribunal.
The expected complaints are understood to relate to Paul McNamara, the lead audit partner responsible for signing off the mutual life insurer's accounts, a second Equitable partner, and to the UK practice as a whole, auditor to Equitable from 1990 to 2001.
Each has until Friday to respond to the JDS, which will consider any submissions before formally laying any complaints. The JDS has the power to impose unlimited fines and strike off firms and individuals from their professional bodies.
Yesterday a spokesman for the accountancy firm confirmed it was preparing a robust response to the JDS's proposed complaints. "We believe the allegations are misguided and we will vigorously defend [ourselves against] them."
Further press coverage:
06/08/2004 - Actuaries set to take disciplinary action
Immediately after ELAS closed in December 2000 the Institute of Actuaries commissioned an investigation into the contributory role of actuaries in the downfall. Despite the Interim 10th report of the Treasury Select Committee in March 2001 laying blame squarely on the conflicted role of individual directors being simultaneously the Appointed Actuary and Financial Director, The Corley Report was a lamentable whitewash for the Actuarial profession (published in September 2001). Criticism has continued to rage against the so-called actuarial profession and it reached a pinnacle in the Penrose Report.
Finally, the Institute has realised that there must be some sacrificial heads. The four consecutive actuaries: Barry Sherlock, Roy Ranson, Alan Nash and Chris Headdon have been notified that they will be subject to a lengthy, private disciplinary hearing in a few months time. Only Chris Headdon is young enough to be affected by a ban and he has recently been barred by the FSA from any directorship in Financial Services for six years. The industry will not shed any tears since they universally despised the hybrid ELAS.
Press coverage:
22/07/2004 - Other press articles, BEFORE the PO's announcement
22/07/2004 - The PO, she say YES!
On Monday July 19, the PO's 47 page report to Parliament was published and it was welcomed news. Ann Abraham is now minded to reopen her investigation into prudential regulation of ELAS up to Dec 1, 2001 - with an open start date.
Predictably, both the Treasury and the FSA had argued agin. The FSA's two submissions are particularly contemptible and contrast starkly with excellent ones by Dr Tony Wright and Andrew Tyrie. The usual twisting of Penrose, predictably, from Ruth Kelly. The alarming fly in the ointment is that the study is predicated on the Government agreeing to Abraham's request to add GAD to the jurisdiction of the PO. They wouldn't dare not…..….would they??
Congratulations are due to opposition MPs and to the support (belatedly) of Society. See ELAS's letter to MPs on the subject May 12 But EMAG is convinced that this result would simply not have come about without our perseverance for the last year. It is pleasing that our submissions are extensively quoted in the report. Well done Ann Abraham (and Iain Ogilvie) for proving to be independent. That was the easy bit. Doing a professional job will prove extremely difficult in the teeth of opposition from Government and the FSA. Read the PO's press notice. Download the report from: http://www.ombudsman.org.uk/publications.html#pca2004
EMAG's reaction:
"This is EXCELLENT news; A triumph for EMAG's perseverance and a victory for common sense, which wouldn't have been achieved without the support of opposition MPs - Andrew Tyrie and Vincent Cable in particular.
EMAG congratulates Ann Abraham on her decision. We trust that her investigation will be rigorous, even-handed and swift and that GAD WILL be included.
EMAG, in addition to giving help to the PO, will be seeking to open up a second front pursuing government compensation for ALL who have lost out in the Equitable scandal with a petition to Brussels against the UK Government for breach of Directives."
Colin Slater
Chairman of EMAG
Press coverage of PO's announcement:
16/07/2004 - ELTA lodges writ
Pauline Skypala, in the FT, described the new litigation on July 14 thus:
"Equitable Life faces its biggest legal challenge yet from a group of more than 700 pensioners who will today issue a multi-million pound claim against the mutual, alleging they were missold their annuities.
The group action, organised by Equitable Life Trapped Annuitants, is on a "no win, no fee" basis with Bristol lawyers Clarke Willmott, which has acted successfully in seven individual misselling cases against Equitable.
Peter Scawen, chairman of Elta, said: "Equitable has done nothing to help the victims of this scandal and their attempts to intimidate us into backing off have failed."
EMAG commented
"On the one hand Equitable's board fiercely resisted EMAGs resolution for just £2 million to pursue in Europe potentially billions in Government compensation and on the other hand it now threatens its own locked in members that it will willingly spend far more than £5 million resisting their action to bleed them dry. This mutually-owned Society board's hypocrisy is breathtaking."
16/07/2004 - What EMAG does
We have been asked to communicate here on this website exactly what EMAG does. Probably the clearest answer is to make available extracts from our report, which was mailed to all EMAG members on July 6. This specifies the two major and five minor priorities that the EMAG committee has established. Click here to read the article.
09/07/2004 - Two excellent Teresa Hunter's articles about Ruth Kelly July 4
The Sunday Telegraph is to be admired for its ongoing crusading stance in standing up to the Treasury and Ruth Kelly:
14/05/2004 - EMAG met with Ruth Kelly
On Wednesday 12th May the committee of EMAG met with Ruth Kelly and five senior Treasury officials to seek to progress the policyholders' case. Here is a short paper that was presented by long-standing EMAG committee member Tom Lake. Click here to read the paper.
EMAG complained that Kelly had gravely misled Parliament as to the content of Penrose's report and distributed EMAG's short précis paper and a VERY important new summary chart comparing Ruth Kelly's assertions with what the Penrose report actually says. Click here to read the summary. PLEASE DO READ THIS AND SHARE WITH YOUR MP.
Click here to read the press release.
04/05/2004 - Ruth Kelly U turn on admissibility of GAD retrospectively
04/05/2004 - EMAG wins right to proceed with Judicial Review of PO
In the High Court on Thursday 29th April, EMAG was given permission to proceed. Click here to see EMAG's press release.
28/04/2004 - Compare and contrast EMAG's précis of Penrose with Ruth Kelly's March 8th statement to the Commons
The Treasury had the Penrose Report for 77 days. It spent the time filleting it for what was an astoundingly biased interpretation of Penrose's excellent, even-handed report. As Dr Goebells taught us "The bigger the lie, the more believable." Here is the link to Ruth Kelly's statement.
Even Equitable seem to agree about the Treasury's bias: See Daily Mail April 1st.
Here is the link to EMAG's précis of Lord Penrose. EMAG suggests you might print off a copy and send it to your MP, pointing out that this is actual content of Penrose's report and it is not as described repeatedly by Ruth Kelly.
02/04/2004 - Evidence to TreasCom from Lord Penrose 16th March
For three hours on the committee interviewed both Lord Penrose and Ruth Kelly and squandered a fabulous opportunity. EMAG submitted a briefing paper to the members in advance. There was no visible evidence that either it or Penrose's report had been read:
Click here to read
And from Ruth Kelly. Click here to read.
Click here to read EMAG's briefing paper
Teresa Hunter on EMAG's submission to TreasCom 7th March
29/03/2004 - About the Commons debate 24th March
Click here to read the full transcript (particularly Letwin, Cable, Lamb and Tyrie)
EMAG's letter to MPs, briefing in advance of debate. Click here to read the letter.
08/03/2004 - Penrose Day
We have waited more than 30 months for this report, which the Treasury has had for the last 77 days. By teatime Monday we'll know what spin the Treasury is putting on it. It will take a great deal longer for policyholders (and EMAG) to inwardly digest the words that Lord Penrose has written. Keep checking in.
07/03/2004 - New EMAG report: Blistering indictment of the FSA
"The failure over the period 1999-2003 of the FSA in protecting policyholders of Equitable Life." By Alex Henney (Chairman of EMAG). A submission to the Treasury select committee investigation into: "Restoring confidence in long-term savings.". Note that Lord Penrose's remit is to August 2001. Conveniently for the FSA, this therefore means that the CONpromise in the autumn of 2001 is outwith. Henney has much to say about the behaviour of the FSA and the FOS in "handling" Equitable Life in the last three years, to date. He argues that the two should be separated and the FSA MUST be made accountable.
Read the press release
Read the five page summary
Download the abridged 41 page report in full (PDF File)
Teresa Hunter in the Herald
06/03/2004 - Guardian rebutted!
Guardian Saturday February 28th: Rebuttals to Patrick Collinson's suggestion that Equitable policyholders are undeserving:
05/03/2004 - Treasury's contempt:
Policyholders, Parliament and the press have been treated with high-handed contempt by the Treasury. None more so than EMAG itself. On Wednesday 3rd March EMAG wrote to protest to the minister responsible, Ruth Kelly: Click here to read the letter.
09/02/2004 - NEW REPORT ON ELAS BONUSES
In December EMAG noted that the Treasury was beginning to "spin" that ELAS policyholders were fat cats who had, in any case, benefited from super-charged over-bonusing in earlier years - hence undeserving of the public purse.
EMAG decided to commission a clinical analysis, again from chartered accountants Burgess Hodgson (who are up to speed on matters Equitable). On February 7th EMAG published this new brief, fascinating report. It evaluates the performance of money invested in ELAS in each year of the 1990s and returns achieved - with and without incurring penalty on leaving. This new helpful-to-all report is called: "Equitable Life Rates of Growth".
See the Summary page
See the Conclusions
Read the EMAG press release
Download the complete report as a PDF file
As a gesture of goodwill, EMAG sent a hard copy to the Treasury, albeit with a rather terse response to Ruth Kelly's last extremely unhelpful letter to EMAG of Jan 7th. Click here to read the letter.
04/02/2004 - E7 question ELAS board's "U turn" on government compensation
The "E 7" group of groups has reacted to the press briefing given by Charles Thomson on Jan 21st and urged the board to back policyholders' quest for billions in compensation for ALL who have lost through mis-regulation. Click here to read the press release.
28/01/2004 - Another EMAG letter to ALL MPs
On Jan 28th EMAG wrote to all MPs suggesting that Gordon Brown should present to Parliament the Penrose report and raising alternative ways forward. Click here to download the letter.
Previous letter to ALL MPs from EMAG.
23/01/2004 - The second about face
Charles Thomson's new recommendation is that the best chance of government compensation is through compelling the Parliamentary Ombudsman to look again at ELAS. EMAG has been saying that since autumn 2002 (see press coverage below).
But it's worth looking back to 21st March 2002 to see why Ann Abraham's predecessor, Sir Michael Buckley, emphatically believed that the PO was the WRONG investigatory body because of severe limitations on what it can look at and criticise. For example, conduct of business - which has been half the regulatory problem - is outside the PO's remit. See his interesting testimony, Para 74 and then 77 and 79:
Click here to read the testimony
23/01/2004 - An ELAS double volte face 21st Jan
The Society held a press briefing. Having spent more than a year saying we must wait and see what Penrose says and "grandstanding" about suing the government for compensation if Penrose shows evidence of regulatory failure, now that the leaks indicate Penrose WILL deliver live bullets the board has changed its mind. Without seeing Penrose it announced that it probably won't be suing the government. Click here to see ELAS press background information.
21/01/2004 - EMAG's 35th committee meeting minutes
Click here to read the minutes.
15/01/2004 - Vanni Treves' skyhook vision:
15/01/2004 - Early Day Motion 176
The Tories have now approved this initiative by Dr Ian Gibson. To date 113 MPs have signed, including56 Labour, 33 Tories and 17 LibDems. To find out if yours has click here.
And if he hasn't, why not use: www.faxyourmp.com? It's remarkably easy.
15/01/2004 - FOS concerns:
n mid-December EMAG wrote to Walter Merricks (chief ombudsman) expressing its concern about the FOS's "process" and the vast disparity of resources which we characterised as David and Goliath. Click here.
On Jan 8th the principal ombudsman, Jane Whittles, sent a short and inadequate response that not only did not address the substance of EMAG's concerns but also included questionable information. EMAG will respond. Click here to download the letter (Pdf).
EMAG member Paul Weir has written to the FOS again to raise the question of the Counsel's Opinion of George Bompas QC and why it has not been addressed in the FOS's Opinion of Johnathan Hirst QC and he challenges the FOS's refusal to divulge its instructions to Counsel. Click here to read the letter.
To be clear: EMAG is totally supportive of an independent, strong FOS and is making representations about strengthening the FOS to the Treasury select committee.
15/01/2004 - Ruth Kelly
In December, EMAG wrote twice to Ruth Kelly. EMAG sought an early meeting to discuss the Society to compliment the meeting that she had held with ELAS in November. EMAG provided, as a courtesy, an advanced hard copy of "The Alternative Penrose Report". We asked to be supplied with the Penrose report, in confidence, 72 hours in advance of publication so that we could make mature comments to journalists when asked. Ruth Kelly replied on 7th January. ALL requests were denied. Click here to download the letter (Pdf).
15/01/2004 - EMAG questions Gordon Brown's integrity:
EMAG took the initiative to the Treasury, because we believe that Gordon Brown is where the buck stops. Whilst the Treasury is deciding in private with the FSA on its reaction to Penrose's report, which it has had in part because of Maxwellisation for months, EMAG wants to communicate to the Treasury that another fudge won't do. If necessary, EMAG will take this to the EU, where the excuse of light touch regulation doesn't cut any ice. Here's the letter EMAG sent to every MP on January 8th asking them to write to Gordon Brown. Maybe there are points that you might pick up and include in correspondence with your MP? Click here to read the letter.
14 January '04 - Press coverage of the letter by Tessa Thorniley in the Telegraph.
13 January '04 - Jean Eaglesham in the Financial Times
07/01/2004 - The next two weeks are critical
The Treasury made a further announcement on January 5th to say that Penrose will be coming soon. What was revealing was the admission that the FSA has already received the report and is working with the Treasury on a response. So much for the reason given for the delay - to give time to "legal" the document. Now we know that the reason for delay is so that the Treasury can prepare its damage limitation strategy.
The next two weeks would be a VERY opportune time for you to write AGAIN to your MP to stress that you will not be satisfied if the Treasury proposes a cheap, face-saving scheme that denies comprehensive compensation.
Interestingly, the Treasury had no trouble finding the many extra millions last summer to fund the MPs own pension shortfall. The publication of Penrose gives the government the opportunity to rekindle confidence in the regulator by promising to make good if regulation fails. Wriggling out of paying up will further damage consumer confidence in the financial services industry with much more damaging long-term consequences.
PLEASE. Do write again. Why not use: www.faxyourmp.com
