Cater Allen, now part of the offshore banking operations of Abbey National, has been drawn
  into an investigation of the handling of more than œ1m in investors' money.

 The events that are under investigation took place before Abbey National bought the former
 discount house for œ191m in 1997.

 The police investigation, authorised by the Jersey attorney-general's office, is thought to focus on Rupert Seal, who allegedly presented himself as a representative of Cater Allen   Bank Jersey in discussions about setting up a trading account, according to a statement  given to police. One meeting took place at Cater Allen's then head office in London, according  to the statement.

 Mr Seal yesterday confirmed the police investigation but said he had never told anyone he
worked for Cater Allen. "That's not true," he said.

"Rupert Seal at no point worked for Cater Allen," Jeremy Norfolk, the bank's managing
 director, said yesterday. His father, David Seal, was a director of Jefferson Seal, a Jersey stock-broker that Cater Allen bought in 1993. The elder Mr Seal has retired and has no
connection with the investigation. Rupert Seal worked for a British Virgin Islands trust
 company, for whose clients he deposited money in accounts at Cater Allen Bank Jersey. The
 bank later also held accounts, including eurobonds in safe custody, for clients of a Jersey
trust company with which Mr Seal was associated.

 When the eurobonds were sold, Cater Allen sent the money, on Mr Seal's instructions, to a
 US broker. The fall in value of the subsequent investments led to the investigation.

 Jersey police are thought to have launched the probe after a complaint from a senior British
 banker who had been acting as an adviser to a City-based investment company.

Police are understood to be co-operating with US authorities who have been investigating
certain bank transfers emanating from Jersey.

Police on the island are investigating the possibility that monies invested by the original
 complainant may have been invested in shares in the US without the prior knowledge or
 approval of a client.

The original complaint dates to 1995, when the senior banker says he met Mr Seal for the first
time in London, but the investigation is thought to have gathered steam over the past year
 after additional information was received from US regulators about suspect transactions in
  Jersey.

 Allegations were also brought to the attention of the Bank of England.