Breach of court order may force SFO to pulp report

The Serious Fraud Office faces new embarrassment after being forced to withdraw from sale and possibly destroy thousands of copies of its latest annual report. The SFO has also had to write to those who have already received copies of the report asking them to disregard a section that puts the office in the humiliating position of breaching a court order.

The SFO is currently deciding whether to pulp the remaining copies of its report or replace the offending page. The error was realised too late, however, to do anything about the many early copies of the report that had already been sent out to the press and others.

A letter from the red-faced fraud office has been sent to the report's recipients, reminding them they, too, are limited by the court's reporting restrictions. Because of this The Independent is unable to give any further details of the SFO's error.

However, the climbdown is a serious embarrassment for the SFO and its new director Rosalind Wright, who only took control of the office in April. It comes less than a week after Mrs Wright used the report to publicise a list of recommendations for changing the current system of prosecuting fraud and regulating the City.

This week's faux pas will have serious repercussions at the SFO if it undermines its credibility at the same time as it is calling for broader powers to combat the rising levels of financial fraud that it highlighted in its annual report. The report showed a sharp increase in the number of cases of suspected fraud against investors.

It is understood the error in the report slipped through because the court order it breaches was imposed after the completion of an early draft. The SFO failed to notice that it needed make a change before the final version was printed.

The embarrassment comes after a run of successful convictions by the SFO which appeared to be restoring its reputation. The office has come in for widespread criticism since its founding in 1988 after failing to secure convictions in a number of high-profile prosecutions.

In a letter to the Attorney- general on Monday, Mrs Wright called for the creation of a single investigatory body to replace the current system which sees responsibility for prosecuting fraud split between the SFO, the Crown Prosecution Service and the Department of Trade and Industry. She said it was time for recommendations made 11 years ago by Lord Roskill to be enacted.