trump20tower20batumi

Robert Mueller has assembled a team of sixteen lawyers. One of them is fluent in Russian, and five have extensive experience investigating and prosecuting cases of money laundering, foreign corruption, and complex financial conspiracies. The path from Trump to Putin, if one exists, might be found in one of his foreign real-estate deals.
A stalled 2011 plan to build a Trump Tower in Batumi, a city on the Black Sea in the Republic of Georgia, has not received much journalistic attention. The deal, for which Trump was reportedly paid a million dollars, involved unorthodox financial practices that several experts described to me as “red flags” for bank fraud and money laundering; moreover, it intertwined his company with a Kazakh oligarch who has direct links to Russia’s President, Vladimir Putin. As a result, Putin and his security services have access to information that could put them in a position to blackmail Trump. (Sekulow said that “the Georgia real-estate deal is something we would consider out of scope,” adding, “Georgia is not Russia.”)

The developer that had paid Trump and invited him to Georgia—a holding company known as the Silk Road Group—had been funded by a bank that was enmeshed in a giant money-laundering scandal.

Trump Tower Batumi was going to be funded not by Trump but by businesses with ties to Kazakh oligarchs, including Timur Kulibayev, the son-in-law of Kazakhstan’s autocratic ruler, Nursultan Nazarbayev, and a close ally of Putin.

The Financial Action Task Force, headquartered in Paris, is led by representatives from thirty-seven nations. In 2007, the task force issued a report about the use of real-estate projects for money laundering. The report makes note of several red flags. It warns of “complex loans” in which businesses “lend themselves money, creating the appearance that the funds are legitimate.” It also warns of the use of offshore shell companies and tangled corporate legal structures, especially those in which third parties are hired to administer a company and conceal its true ownership. These intertwined companies can then trade property among themselves, in order to create inflated valuations: “An often-used structure is, for example, the setting up of shell companies to buy real estate. Shortly after acquiring the properties, the companies are voluntarily wound up, and the criminals then repurchase the property at a price considerably above the original purchase price. This enables them to insert a sum of money into the financial system equal to the original purchase price plus the capital gain, thereby allowing them to conceal the origin of their funds.”
The report states that money launderers often find that “buying a hotel, a restaurant or other similar investment offers further advantages, as it brings with it a business activity in which there is extensive use of cash.” Casinos—like the one planned for the Trump Tower Batumi—are especially useful in this regard. The casino was to be owned by the Silk Road Group and its partners.
Alan Garten, the chief legal officer for the Trump Organization, declined to describe the due diligence behind the Batumi tower. When the deal was signed, the general counsel for the Trump Organization was Jason Greenblatt, who is now President Trump’s envoy to negotiate Middle East peace. (The White House declined to comment for this story, referring me instead to Sekulow, Trump’s lawyer, who also declined to discuss the specifics of the Batumi deal.)

Ross Delston, a prominent anti-money-laundering attorney in Washington, D.C., told me that, if one of his clients approached him with the possibility of entering a licensing relationship with the people involved in the Batumi deal, he “would tell him not to walk away but to run away—to run like hell.” He explained, “There are too many aspects of the deal that don’t make sense, and there’s no way, as an outsider, that you could conduct sufficient due diligence to figure out if it is criminal.”
So many partners of the Trump Organization have been fined, sued, or criminally investigated for financial crimes that it is hard to ascribe the pattern to coincidence, or even to shoddy due diligence. In criminal law, there is a crucial concept called “willful blindness”: a person can be convicted of a crime even if he was unaware of certain aspects of the crime in which he was engaged. In U.S. courts, judges routinely explain to juries that “no one can avoid responsibility for a crime by deliberately ignoring what is obvious.” (When the Trump Organization cancelled the Batumi deal, it noted that it held the Silk Road Group “in the highest regard.”)

http://www.newyorker.com/magazine/2017/08/21/trumps-business-of-corruption

[June 5 2016 Hank Greenberg can be sued for hiding insurance company’s losses]

AIG Broadway

American International Group

The New York Court of Appeals ruled that state officials can try to recover millions of dollars in bonuses and interest from Former American International Group CEO Maurice “Hank” Greenberg , 91, and his co-defendant, Howard Smith, 71, former AIG chief financial officer.In 2005, then-Attorney General Eliot Spitzer accused Greenberg and Smith of using fraudulent transactions to hide the insurance company’s losses and mislead investors about its financial condition.

Greenberg’s lawyer, David Boies, later tried to get the charges dismissed, arguing that a $115 million settlement between AIG executives such as Greenberg and a group of shareholders should have ended the case. But the court rejected that argument and ordered the trial to proceed. More than $55 million may be at stake. In addition, the court said the state could seek to ban Greenberg and Smith from the securities industry and from serving as officers or directors of public companies. The U.S. government in a separate case last August appealed a judge’s ruling that sided with Greenberg on a legal claim over AIG’s bailout and found that the Federal Reserve exceeded its authority in the insurer’s bailout.
The case centers on a transaction with General Re, a unit of Warren Buffett’s Berkshire Hathaway. The New York suit claims Greenberg orchestrated a $500 million transaction that boosted loss reserves without transferring risk. A second transaction, with Capco Reinsurance Co, allegedly hid a $210 million underwriting loss in an auto-warranty program
The People of the State of New York by Eric T. Schneiderman v. Maurice R. Greenberg

[April 4 Americans in Panama Papers: ‘Wait. Just look at what’s coming…’ ]

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Americans later

Jen Mills for Metro.co.uk   But weirdly, considering it’s the world’s largest economy, there was nobody from the USA   .Stefan Plöchinger, digital editor of German newspaper Süddeutsche Zeitung which obtained the leaks, shot out this teaser earlier today, saying: ‘Wait. Just look at what’s coming…’

[August 17 2015 Carlos Hank Rhon and Banamex under DoJ subpoenas ]

Justice Department is examining anti-money laundering practices at Banco Nacional de Mexico, Citigroup’s Mexico unit known as Banamex, to see if any of its clients were involved in money laundering, Justice wanted Citigroup (C.N) to provide information on accounts tied to four businesses affiliated with Hank Rhon, two units each of Grupo Financiero Interacciones SA (GFINTERO.MX) and Grupo Hermes SA, which are controlled by Hank Rhon and his family as well as a fifth firm, Banco Monex, that’s not connected to Hank Rhon. Hank Rhon, a businessman involved in banking, construction and heavy industry, is the son of Carlos Hank Gonzalez, a longtime force in Mexico’s ruling party who died in 2001.
more Banamex

Carlos Hank Rhon’s fortune includes assets in the financial, industrial, real estate and transportation industries. His best-known company is bank holding company Grupo Financiero Interacciones, where he and his family own a 74% stake. In 2014 his son, Carlos Hank González, left the company when he became chairman of the board of another banking conglomerate, Grupo Financiero Banorte, in which his mother’s family has a 12% stake. In addition to Interacciones, Hank Rhon owns Grupo Hermes, an industrial conglomerate with interests in construction, infrastructure projects, energy, transportation, tourism and auto dealerships. He is the son of one of Mexico’s best-known politicians, the late Carlos Hank Gonzalez, who held several key government positions including Mexico City mayor, Secretary of Agriculture and governor of his home state of Mexico. [Clear?]
Jorge Hank Rhon (born January 28, 1956) is a Mexican politician, businessman and owner of Mexico’s largest sports betting company, Grupo Caliente. An eccentric and controversial personality, he served from December 2004 to February 2007 as the president of the municipality of Tijuana. He is the son of former Mexico City mayor Carlos Hank González and Guadalupe Rhon.Hank has long been target of diverse rumors and accusations. Tijuana

[August 17 Doral Bank pair charged with $2.35 million wire fraud and money laundering]

 Doral search was being conducted by the white-collar crime unit regarding a federal offense

Doral search was being conducted by the white-collar crime unit regarding a federal offense

Annelise I. Figueroa. VP Property & Facilities at Doral Bank

Annelise I. Figueroa. VP Property & Facilities at Doral Bank

Doral could possibly be taken over by the FDIC Friday, people with knowledge of the matter told. A federal grand jury returned a 13-count indictment Feb. 18 charging Defendant Annelise I. Figueroa and Defendant Rolando Rivera Solis with financial institution fraud, misapplication of $2.35 million in bank funds, wire fraud and money laundering.

[December 26 2014 Doral Bank raid connected to 2011 unsolved murder?]
Federal Bureau of Investigation agents entered the Doral Bank’s offices about 8:15 a.m december 23. in San Juan to collect information including computers and documents, the Doral search was being conducted by the white-collar crime unit regarding a federal offense. However, she said she wouldn’t exclude the possibility that the probe may also relate to the 2011 murder of a Doral executive, Maurice Spagnoletti. The raid took place at the bank’s information technology offices in Hato Rey.
Spagnoletti, 56, was shot while driving home from work to the fashionable Condado beach front district in rush-hour traffic in June 2011 after leaving the Bank, in what authorities said was a professional execution. At that time, the man was Executive Vice President of Doral Bank, a position he occupied for six months.
Following the execution of Spagnoletti, his widow and daughter, Marisa and Lucy , respectively, filed a lawsuit civil at the federal level in 2013 for “wrongful death” or death by negligence, involving officers of the Bank, including its President Glen Wakeman. However, they withdrew the demand in January 2014.
In the lawsuit, the relatives of Spagnoletti claimed that he received threats after he found fraudulent bank transactions and advised President Glen Wakeman should dismiss Annelisse Figueroa, who was Executive Vice President of operations together with the head of security Jose Robles and Vice President, Chief compliance and Chief Legal, Enrique Ubarri Baragaño, defendants in the action.

Since 2012, Doral Bank has been operating under a consent agreement with the Federal Deposit Insurance Corp. and parallel sanction by the Federal Reserve Bank of New York, which required the directors to set policies and closely monitor the bank’s financial reporting, among other things, according to the complaint.
But the company ended up surprising investors on March 18 when it said it could not file its Form 10-K report for 2013 on time because it discovered material weakness in its accounting controls, Fair View said in its complaint. The bank subsequently revised its reported loss for the quarter ending Sept. 30 to $2.57 per share from $1.49 a share, it said.
Spagnoletti was president of Greenville-based Carolina First Bank, a subsidiary of The South Financial Group Inc., from April 2006 to June 2008.
fraud

[October 15 Citigroup Inc. fined $2 million in Oceanografía- Banamex]

Luis Robles and Javier Arrigunaga

Luis Robles and Javier Arrigunaga

The Mexican regulator, the CNBV, said October 15 that in its review of Oceanografía’s relationship with Banamex, it found actions that could be considered crimes. it has fined the local unit of Citigroup Inc.a little more than $2 million for failing to prevent an alleged fraud against the bank by a client, oil-services firm Oceanografía.
The regulator also said that Banamex should have had better internal controls in place to prevent such losses.The incident also has led to the departure of high-level employees at the bank, with Citigroup announcing this month that Banamex Chief Executive Javier Arrigunaga had resigned.

 

[June 30 BNP “perpetrating what was truly a tour de fraud,” pleads guilty]

 

BNP’s general counsel, Georges Dirani, in a Manhattan court on June 30.

BNP hid the names of Sudanese and Iranian clients when sending transactions through its New York operations and the broader American financial system. In the bank’s Geneva office, “there was policy to strip, amend and omit” information identifying Sudanese clients. “This conspiracy was known and condoned at the highest levels of BNP,” Edward Starishevsky, an assistant district attorney in Manhattan, said in court on Monday when the bank pleaded guilty to one count of falsifying business records and one count of conspiracy. BNP agreed to pay an $8.9 billion penalty

http://www.glassdoor.com/Salary/BNP-Paribas-New-York-City-Salaries-EI_IE10342.0,11_IL.12,25_IM615.htm
[June 21]

French bank BNP Paribas and the U.S. government are close to settling the criminal investigation of the bank for between $8 billion and $9 billion.
According to U.S. prosecutors, the bank conducted at least $30 billion of illegal transactions on behalf of companies and government agencies in Sudan over a period of five years, violating U.S. sanctions. In addition to paying a record fine, the bank is expected to plead guilty to conspiring to violate the International Emergency Economic Powers Act and agree to a temporary prohibition on its ability to conduct transactions in U.S. dollars. Although the fine seems huge compared with those paid by other banks in comparable cases, prosecutors feel that it’s justified because of the severity of the misconduct as well as the fact that BNP didn’t cooperate as fully as the government would have liked.
The bank conducted at least $30 billion of illegal transactions on behalf of companies and government agencies in Sudan over a period of five years, violating U.S. sanctions. In addition to paying a record fine, the bank is expected to plead guilty to conspiring to violate the International Emergency Economic Powers Act and agree to a temporary prohibition on its ability to conduct transactions in U.S. dollars.

[April 30]
A development could produce the first guilty plea to criminal charges from a major bank in more than two decade. A lack of criminal prosecutions of banks and their leaders fueled a public outcry over the perception that Wall Street giants are “too big to jail.” The decision is to seek guilty pleas in two of the most advanced investigations: one into Credit Suisse for offering tax shelters to Americans, and the other against France’s largest bank, BNP Paribas, over doing business with countries like Sudan that the United States has blacklisted. The approach applies to American banks, though those investigations are at an earlier stage.

Preet Bharara, the United States attorney in Manhattan, has opened his own criminal investigations into a fraud at Citigroup’s Mexican affiliate and other American banks. And in the recent speech, Mr. Bharara warned, “You can expect that before too long a significant financial institution will be charged with a felony or be made to plead guilty to a felony, where the conduct warrants it.”

BNP’s shares are down less than 4%–a steep fall, but hardly calamitous. And its CDS have hardly budged, actually trading roughly one basis point tighter, at 64 basis points, according to data provider Markit. So much for banks being too big to indict.

[April 3]

There was valid documentation for $185 million of work, Citigroup said, but Banamex had advanced Oceanografía a total of $585 million. Some of Oceanografía’s invoices, Citigroup said, “were falsified to represent that Pemex had approved them. A Banamex employee processed them.”

There was valid documentation for $185 million of work, Citigroup said, but Banamex had advanced Oceanografía a total of $585 million. Some of Oceanografía’s invoices, Citigroup said, “were falsified to represent that Pemex had approved them. A Banamex employee processed them.”

Michael Corbat, chief of Citigroup

Citigroup co-President Manuel Medina-Mora, whose job includes oversight of Mexican operations,  Kathleen Corbet ran Standard & Poor's

Citigroup co-President Manuel Medina-Mora, whose job includes oversight of Mexican operations, Kathleen Corbet ran Standard & Poor’s

A criminal investigation, overseen by the F.B.I. and prosecutors from the United States attorney’s office in Manhattan has opened as to whether holes in Citigroup Inc’s internal controls contributed to the fraud in Mexico. The question for investigators is whether Citigroup — as other banks have been accused of doing in the context of money laundering — ignored warning signs.
At Citigroup’s Grupo Financiero Banamex, Oceanografía became one of Banco Nacional de Mexico (Banamex)’.s largest corporate clients.
Under a short-term lending arrangement, Banamex would advance money to Oceanografia SA de CV, whose existence hinged almost entirely on government contracts. Banamex issued the loans with the understanding that Oceanografía had received contracts from Petróleos Mexicanos (Pemex), the state-owned oil monopoly. Once the work was completed, Pemex would repay the loan to Banamex.
Oceanografía’s financial problems became apparent in January 2014, when it announced that it would not be able to pay interest on a debt of $335 million contracted in 2008. Mexican authorities suspended Oceanografía from obtaining additional government contracts for several months. Shortly after, Banamex discovered a fraud.
There was valid documentation for $185 million of work, Citigroup said, but Banamex had advanced Oceanografía a total of $585 million. Some of Oceanografía’s invoices, Citigroup said, “were falsified to represent that Pemex had approved them. A Banamex employee processed them.”
Banamex accounts for 13 percent of Citigroup’s revenue.
At first glance, Citigroup appeared to be the victim of the fraud involving the Mexican oil services company Oceanografía. After all, the bank lost millions of dollars.
But the F.B.I. and prosecutors are questioning whether Citigroup was equal parts victim and enabler.
For one, it is unclear whether the wrongdoing at Citigroup was actually limited to a single Banamex employee, as early reports indicated. The authorities are investigating whether the scheme involved co-conspirators at the bank’s offices in the United States.
Banamex, acquired in 2001, is the biggest unit in Citigroup’s Latin America operations, which account for about 20 percent of total revenue. Profit at the subsidiary almost quintupled in the past decade, burnishing its reputation as well-managed and shielding the Mexico City-based bank from corporate interference.
The fraud allegations and a disclosure this week that Banamex USA received subpoenas in the U.S. related to money laundering now tarnish the unit’s image. The probes also could put pressure on Citigroup co-President Manuel Medina-Mora, whose job includes oversight of Mexican operations, and Banamex Chief Executive Officer Javier Arrigunaga, 50.

[September 15 2011]

Kweku Adoboli, a 31-year old trader on UBS' exchange-traded-fund desk in London

Kweku Adoboli, a 31-year old trader on UBS’ exchange-traded-fund desk in London

 

 “Director ETF and Delta1 Trading at UBS Investment Bank.”

“Director ETF and Delta1 Trading at UBS Investment Bank.”

Kweku Adoboli, a 31-year old trader on UBS’ exchange-traded-fund desk in London, has been arrested by City of London police in connection with rogue trading that has cost the Swiss banking giant an estimated $2bn (£1.3bn). The landlord at Mr Adoboli’s former £1,000-a-week apartment in Shoreditch, east London, described him today as a “nice guy”. a trader on UBS’ exchange-traded-fund desk in London. His title is listed as “Director ETF and Delta1 Trading at UBS Investment Bank.”

Investment banks’ Delta One operations trade securities that attempt to track an asset closely. Details are not yet known about what Adoboli traded.

Delta One can be considered the last domain of prop trading in the banking sector, where via market-making activities, traders can still get away with taking ample risks.

This is one of the few divisions in the banking community which is still hiring.

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Libor out; SONIA in?

28 July, 2017

Trial Begins For British Traders Anthony Conti and Anthony Allen Over Alleged Libor Rate Manipulation

Andrew Bailey, chief executive of the Financial Conduct Authority, says that work must “begin in earnest” on shifting to an alternative index to Libor, saying the end of 2021 would offer time to ensure a smooth transition.The BoE has already been refining its overnight sterling funding rate SONIA, which is based on actual transactions, and which the central bank administers itself, as the substitute for Libor. At least six bankers on both sides of the Atlantic have been sent to prison for manipulating Libor, although some in the United States are still awaiting sentencing.

 

[July 22 Deutsche Bank and JPMorgan Chase settle yen Libor and Euroyen Tibor cases; “London Whale”; charges dropped ]

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U.S. prosecutors have decided to drop criminal charges against two former JPMorgan Chase & Co derivatives traders implicated in the “London Whale” trading scandal that caused $6.2 billion of losses in 2012.

In seeking the dismissal of charges against Javier Martin-Artajo and Julien Grout, the Department of Justice said it “no longer believes that it can rely on the testimony” of Bruno Iksil, a cooperating witness who had been dubbed the London Whale, based on recent statements he made that hurt the case.

Prosecutors also said efforts to extradite Martin-Artajo and Grout, respectively citizens of Spain and France, to face the charges have been “unsuccessful or deemed futile.”

Acting U.S. Attorney Joon Kim in Manhattan asked a federal judge for permission to drop charges that included securities fraud, wire fraud and falsifying records. Martin-Artajo and Grout were indicted in September 2013.

 

 

Deutsche Bank AG (DBKGn.DE) and JPMorgan Chase & Co (JPM.N) have agreed to pay a combined $148 million to end private U.S. antitrust litigation claiming they conspired with other banks to manipulate the yen Libor and Euroyen Tibor benchmark interest rates.

The preliminary settlements, totaling $77 million for Deutsche Bank and $71 million for JPMorgan, were detailed in filings late Friday July 21 in the U.S. District Court in Manhattan, and require a judge’s approval.

They followed similar settlements last year with Citigroup Inc (C.N) and HSBC Holdings Plc (HSBA.L) totaling $23 million and $35 million, respectively.

 

January 17 U.S. Libor antitrust actions may proceed ]

The U.S. Supreme Court on January 17 allowed private antitrust lawsuits brought by investors including big U.S. cities accusing major banks of conspiring to manipulate the pivotal Libor benchmark interest rate to move forward. The justices rejected an appeal filed by a group of banks including Bank of America Corp(BAC.N), Deutsche Bank AG(DBKGn.DE), UBS AG(UBSG.S) and JPMorgan Chase & Co(JPM.N) of a May 2016 ruling by the New York-based 2nd U.S. Circuit Court of Appeals that allowed various lawsuits against them to proceed. The appeals court reversed a lower court judge’s dismissal of investors’ antitrust claims against the banks.   The private litigation is separate from Libor rigging probes that have resulted in roughly $9 billion of sanctions worldwide, including $2.5 billion against Deutsche Bank in April 2015. Several bank affiliates have pleaded guilty to criminal charges, and more than 20 people have been criminally charged.

[May 3 2016 Alaska Electrical”banging the close” case settled ]

Alleged illegal activity including the execution of rapid trades just before the rate was set each day, called “banging the close,” causing the British brokerage ICAP Plc (IAP.L) to delay trades until they moved ISDAfix where they wanted, and posting rates that did not reflect market activity. Settled is a private U.S. lawsuit accusing them of rigging an interest rate benchmark used in the $553 trillion derivatives market.

Under the settlement, payments would include $52 million from JPMorgan; $50 million each from Bank of America, Credit Suisse, Deutsche Bank and RBS; $42 million from Citigroup and $30 million from Barclays.
Alaska Electrical Pension Fund et al v. Bank of America Corp et al, U.S. District Court, Southern District of New York, No. 14-07126. The settlement made public on May 3, which requires court approval, resolves antitrust claims against Bank of America Corp (BAC.N), Barclays Plc (BARC.L), Citigroup Inc (C.N), Credit Suisse Group AG (CSGN.S), Deutsche Bank AG (DBKGn.DE), JPMorgan Chase & Co (JPM.N) and Royal Bank of Scotland Group Plc (RBS.L).

[April 15 Deutsche Bank AG settles London Gold Fixing conspiracy ]

John Cryan, the British former chief financial officer of UBS

John Cryan, the British former chief financial officer of UBS

April 14 Deutsche Bank AG agreed to settle U.S. lawsuits accusing it of conspiring with other banks to manipulate gold and silver prices at investors’ expense, court papers show.

The settlements were disclosed in letters filed in Manhattan federal court by lawyers representing investors and traders who accused Deutsche Bank of violating U.S. antitrust law.

Terms were not disclosed, but both settlements will include monetary payments by the German bank. Deutsche Bank also agreed to help the plaintiffs pursue claims against other defendants.The plaintiffs accused Deutsche Bank of conspiring with Bank of Nova Scotia, Barclays Plc, HSBC Holdings Plc and Societe Generale to manipulate prices of gold, gold futures and options, and gold derivatives through twice-a-day meetings to set the so-called London Gold Fixing.

They also accused Deutsche Bank, HSBC and ScotiaBank of a similar conspiracy to manipulate silver prices by rigging the daily Silver Fix.

UBS AG was also accused in both lawsuits of conspiring to exploit metals prices.The cases are In re: Commodity Exchange Inc Gold Futures and Options Trading Litigation, U.S. District Court, Southern District of New York, No. 14-md-02548; and In re: London Silver Fixing Ltd Antitrust Litigation in the same court, No. 14-md-02573.

[June 2015 John Cryan, British former chief financial officer of UBS CEO of Deutsche Bank ]
“It is categorically false that pressure from regulators [known as BaFin,] was a factor in the decision of the co-C.E.O.s to step down early,” Michael Golden, the spokesman, said in an email. He pointed out that Mr. Jain would not receive about 15 million euros in pay he would have been entitled to if he had been fired. Mr. Jain will leave at the end of June while Mr. Fitschen will remain another year.

Sunday 7 June 2015 14.36 EDT Anshu Jain will leave Deutsche Bank at the end of this month, with Jürgen Fitschen staying on until the bank’s annual meeting in 2016. The surprise move of the joint chief executives of Deutsche Bank came just over a month after Deutsche was fined a record $2.5bn (£1.7bn) for rigging Libor, ordered to fire seven employees and was accused of being obstructive towards regulators in their investigations into the global manipulation of the benchmark rate. John Cryan, the British former chief financial officer of UBS, will replace Jain as co-chief executive. When Fitschen departs he will not be replaced, leaving the 54-year-old Briton in sole charge.

[June 5 Deutsche Bank AG and its role in Ruble flight]

Deutsche Bank CEO Juergen Fitschen dances with Friederike Lohse

Deutsche Bank CEO Juergen Fitschen dances with Friederike Lohse

Transactions involving stocks bought by Russian clients in rubles through Deutsche Bank, and simultaneous trades through London in which the bank bought the same securities for similar amounts in U.S. dollars allowed Russian clients to move funds out of Russia “without properly alerting the authorities,” Deutsche Bank AG ithinks this may have involved about $6 billion over more than four years.
The Bank of Russia approached Deutsche Bank in October asking the firm to examine the stock-trading activities of some clients in the country, said one person, who asked not to be identified because the discussions are private. The German lender is analyzing data from 2011 through early 2015, and has alerted Britain’s Financial Conduct Authority, the European Central Bank and Germany’s Bafin of the investigation.

Since 2006, , Russian individuals have sent nearly $200 billion out of the country—or more than 10 percent of the country’s gross domestic product for 2013. And the flow of cash accelerated, up from $5.9 billion in the first quarter of 2013 to $13.4 billion in the third quarter of 2014.

[April 23 Germany’s largest lender by assets will book a profit and “near record revenues” for the first quarter, despite LIBOR fine]
Deutsche Bank AG’s alleged involvement in rigging of foreign-exchange markets, is likely to involve an even higher fine than the Libor investigations. Deutsche Bank is also being probed for alleged violations of U.S. sanctions on countries such as Iran and over high-frequency trading.
Deutsche Bank will agree to plead guilty to manipulation and acknowledge that its internal monitoring systems were insufficient to prevent the manipulation of Libor. Deutsche Bank is nearing a settlement fine of more than $2.15 billion with British and American regulatory authorities. The bank is subject to 180 regulatory investigations and faces 1,000 lawsuits with a claim value of more than €100,000 each, Deutsche Bank has paid more than €5 billion over the past two years for settlements and fines stemming mostly from the financial crisis. Annual revenue 2014 $47.30 B

 

 

[November 17 2014 JPM legal costs reserve $5.9 billion: possible 2006 Mortgage Operations problem]

Mortgage operations post-election caper at DOJ?

Mortgage operations post-election caper ot DOJ?

“The $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare”
Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as “massive criminal securities fraud” in the bank’s mortgage operations.
Thanks to a confidentiality agreement, she’s kept her mouth shut since then
Read more: http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106#ixzz3IOZStO6H

President and chief executive officer of JPMorgan Chase, James “Jamie” Dimon

Justice Department is conducting a criminal investigation into foreign exchange trading by JPMorgan Chase & Co. JPMorgan’s filing came on the same day that HSBC set aside $1.6 billion for legal costs, some of which is earmarked for an ongoing investigation into that bank’s foreign exchange trading business by U.K. regulators. JPM might need as much as $5.9 billion to cover losses beyond reserves for legal matters, up $1.3 billion from the end of June, and the most since since mid-2013. In October, Citigroup — another bank in settlement talks with regulators — slashed its previously-reported third-quarter profits in order to factor in an additional $600 million in legal costs. Large banks, especially in Europe, have taken billions of dollars worth of hits to their profits in the third quarter to deal with expected legal costs stemming from investigations into foreign exchange manipulation. RBS set aside $640 million, Deutsche Bank has had a $1.1 billion legal charge, and Barclays has had a $800 million charge.

“Credit Default Swaps Investigations and Litigation. In July 2013, the European Commission (the “EC”) filed a Statement of Objections against the Firm (including various subsidiaries) and other industry members in connection with its ongoing investigation into the credit default swaps (“CDS”) marketplace. The EC asserts that between 2006 and 2009, a number of investment banks acted collectively through the International Swaps and Derivatives Association (“ISDA”) and Markit Group Limited (“Markit”) to foreclose exchanges from the potential market for exchange-traded credit derivatives. The Firm submitted a response to the Statement of Objections in January 2014, and the EC held a hearing in May 2014. The U.S. Department of Justice (“DOJ”) also has an ongoing investigation into the CDS marketplace, which was initiated in July 2009.
Separately, the Firm and other industry members are defendants in a consolidated purported class action filed in the United States District Court for the Southern District of New York on behalf of purchasers and sellers of CDS. The complaint refers to the ongoing investigations by the EC and DOJ into the CDS market, and alleges that the defendant investment banks and dealers, including the Firm, as well as Markit and/or ISDA, collectively prevented new entrants into the market for exchange-traded CDS products. Defendants moved to dismiss this action, and in September 2014, the Court granted defendants’ motion in part, dismissing claims for damages based on transactions effected before the Autumn of 2008, as well as certain other claims.
Foreign Exchange Investigations and Litigation. DOJ is conducting a criminal investigation, and various regulatory and civil enforcement authorities, including U.S. banking regulators, the Commodity Futures Trading Commission (“CFTC”), the U.K. Financial Conduct Authority (the “FCA”) and other foreign government authorities, are conducting civil investigations, regarding the Firm’s foreign exchange (“FX”) trading business. These investigations are focused on the Firm’s spot FX trading activities as well as controls applicable to those activities. The Firm continues to cooperate with these investigations and is currently engaged in discussions with DOJ, and various regulatory and civil enforcement authorities, about resolving their respective investigations with respect to the Firm. There is no assurance that such discussions will result in settlements.”

In 2013, JPMorgan paid over $20 billion in settlements, fines, and compensation to settle investigations into mortgage securities trading, its massive “London Whale” derivatives loss, and its relationship with Bernie Madoff. JPMorgan’s lawyers accepted the $1.7 billion penalty, stemming from two felony violations of the Bank Secrecy Act for turning a blind eye to the Ponzi scheme run by Bernard L. Madoff. The bank also agreed to pay $350 million to the Office of the Comptroller of the Currency, accepting the agency’s only offer,

[October 31 $6.5 to $35B may be collected from banks in forex investigation]

Major U.S. and European investment banks this month boosted to as much as $6.5 billion their collective war chest/reserves for settling with global regulators who are investigating allegations of collusion and manipulation in the  of the $5 trillion-a-day foreign exchange market.   Earlier this year, banking research firm Autonomous put the worldwide total at around $35 billion.

October 8 U.S. prosecutors expect Banging the close action soon]
U.S. prosecutors are pressing to bring charges against a bank for currency-rate rigging by the end of the year, and actions against individuals will probably follow in 2015, according to people familiar with the probe. are looking into allegations that traders shared data about orders with people at other firms using instant-message groups with names such as  `€œThe Cartel`€ and  `The Bandits  Club.`

One focus is whether dealers sought to move the WM/Reuters benchmark rate in their favor by pushing through trades before and during the 60-second windows when the benchmark is set at 4 p.m. in London each day, a process known in the industry as “banging the close.”
[March 14 European Commission fines over banging the close]
https://screen.yahoo.com/new-york-times/currency-fix-banging-close-065950331.html

[December 4 2013]
A record total of 1.71 billion euros ($2.3 billion) on December 4 was awarded for rigging financial benchmarks. The penalty is the biggest yet to be handed down to banks for rigging the benchmarks used to determine the cost of lending, one of the most brazen violations of conduct since the financial crisis. It is also the highest antitrust penalty ever imposed by the Commission, the EU’s competition regulator. The other banks penalized are Societe Generale, JPMorgan and brokerage RP Martin. Deutsche Bank received the biggest fine of 725.36 million euros. The European Commission said it would continue to investigate Credit Agricole, HSBC, JPMorgan and brokerage ICAP for similar offences.

 

[Earlier] Standard Chartered has put one of its senior forex traders, Matt Gardiner on leave. Richard Usher,J P Morgan chief currency dealer in London, and Citi’s Rohan Ramchandani also went on leave after regulators probing forex manipulation started investigating traders’ use of an instant-message group. [October 29] The U.S. Justice Department is investigating the manipulation of foreign exchange rates, a top federal prosecutor said on October 29, in the first public acknowledgement of such a probe in the United States. Criminal and antitrust authorities have an “active, ongoing investigation” into the possible manipulation, Mythili Raman, the acting head of the department’s criminal division, said. [October 7] Swiss authorities said they were investigating whether financial institutions had colluded to manipulate foreign exchange markets. Traders could potentially influence exchange rates by pushing through large orders exactly at the right time. If those suspicions are proved correct, it could result in yet another embarrassing reputational scandal, not just for individual banks but also for the integrity of the global financial sector. The $4.7-trillion-a-day (CHF4.2 trillion) currency market, the biggest in the financial system, is also one of the least regulated, according to experts. Even the smallest movement in exchange rates could affect the value of investments made by institutional investors, including pension funds. Finma, said it was investigating several Swiss banks but did not name them. The agency also said it was cooperating with authorities in other countries and that banks outside the country were also suspected. UBS is fourth among global banks in currency trading, according to Euromoney. Credit Suisse is a relatively minor player, with 3.7 percent of the currency market vs. 10.1 percent for U.B.S. The largest currency trader globally is Deutsche Bank in Frankfurt, with 15.2 percent of the market. The probes come after reports that dealers at banks pooled information through instant messages and used client orders to move benchmark currency rates. Britain’s Financial Conduct Authority said that month it was reviewing the allegations. The U.S. Commodity Futures Trading Commission has also been reviewing potential violations of the law with regards to foreign currency markets, according to a person familiar with the matter who asked not to be identified. Authorities around the world are investigating the alleged abuse of financial benchmarks by the firms that play a central role in setting them. [August 28] In the space of 20 minutes on the last Friday in June, the value of the U.S. dollar jumped 0.57 percent against its Canadian counterpart, the biggest move in a month. Within an hour, two-thirds of that gain had melted away. The same pattern — a sudden surge minutes before 4 p.m. in London on the last trading day of the month, followed by a quick reversal — occurred 31 percent of the time across 14 currency pairs over two years. For the most frequently traded pairs, such as euro-dollar, it happened about half the time, the data show. The recurring spikes take place at the same time financial benchmarks known as the WM/Reuters rates are set based on those trades. Fund managers and scholars say the patterns look like an attempt by currency dealers to manipulate the rates, distorting the value of trillions of dollars of investments in funds that track global indexes. The recurring spikes take place at the same time financial benchmarks known as the WM/Reuters (TRI) rates are set based on those trades. Now fund managers and scholars say the patterns look like an attempt by currency dealers to manipulate the rates, distorting the value of trillions of dollars of investments in funds that track global indexes. In June that dealers shared information and used client orders to move the rates to boost trading profit. The U.K. Financial Conduct Authority is reviewing the allegations, a spokesman said. “We see enormous spikes,” said Michael DuCharme, head of foreign exchange at Seattle-based Russell Investments, which traded $420 billion of foreign currency last year for its own funds and institutional investors. “Then, shortly after 4 p.m., it just reverts back to what seems to have been the market rate. It adds to the suspicion that things aren’t right.” Authorities around the world are investigating the abuse of financial benchmarks by large banks that play a central role in setting them. Barclays Plc (BARC), Royal Bank of Scotland Group Plc and UBS AG (UBSN) were fined a combined $2.5 billion for rigging the London interbank offered rate, or Libor, used to price $300 trillion of securities from student loans to mortgages. More than a dozen banks have been subpoenaed by the U.S. Commodity Futures Trading Commission over allegations traders worked with brokers at ICAP Plc (IAP) to manipulate ISDAfix, a benchmark used in interest-rate derivatives. ICAP Chief Executive Officer Michael Spencer said in May that an internal probe found no evidence of wrongdoing. Dralers at banks, which dominate the $4.7 trillion-a-day currency market, may be executing a large number of trades over a short period to move the rate to their advantage, a practice known as banging the close. Because the 4 p.m. benchmark determines how much profit dealers make on the positions they’ve taken in the preceding hour, there’s an incentive to influence the rate, DuCharme said. Dealers say they have to trade during the window to meet client demand and minimize their own risk. [April 2013] The Financial Stability Oversight Council (FSOC) recommended April 25 in its latest annual report to Congress that policymakers “promptly” identify other interest rate benchmarks that could replace the London Interbank Offered Rate, which the council said was “unsustainable in the long run.” The lending gauge, known as Libor, comprises a set of rates used to price financial instruments worldwide and is based on self-reported borrowing costs for unsecured loans between banks. The regulators’ call to move from a regime in which banks self-report their borrowing costs to one anchored in actual, observable transactions would shake up the current underpinnings of the financial system. The recommendation is the first of its kind for FSOC, a collection of regulators ranging from the Federal Reserve to the Consumer Financial Protection Bureau that was formed after the financial crisis to spot risks. [March 23] Bank of America Corporation; Bank of America,N.A.; Barclays Bank PLC; British Bankers Association; BBA Enterprises, Ltd.; BBA LIBOR, Ltd; Citigroup, Inc.; Citibank, N.A.; Cooperative Centrale Raiffeissenboerenleenbank,B.A.; Credit Suisse Group AG; Credit Suisse International; Deutsche Bank AG; HSBC Holdings PLC; HSBC Bank USA,N.A.; J.P.Morgan Chase & Co.; J.P. Morgan Chase,N.A.; Lloyds Banking Group,PLC; HBOS PLC; The Norinchukin Bank; Royal Bank of Canada; The Royal Bank of Scotland Group PLC; The Royal Bank of Scotland PLC; The Bank of Tokyo-Mitsubishi UFJ Ltd; UBS Ltd; Westlb AG; and Portigon AG. read more

300px-stockbroker

 

The imminent criminal charges are against members of ‘The Cartel’ chat group, would make good on the government’s long-running promise it would hold individuals to account in the case.   The men are located outside of the U.S., meaning they would have to be extradited, a process that can take months, if not years.  The senior dealers who participated in The Cartel were Richard Usher, formerly of JPMorgan Chase & Co., Rohan Ramchandani, formerly of Citigroup Inc. and Chris Ashton, formerly global head of spot trading at Barclays Plc. Another member, Matt Gardiner, formerly of UBS Group AG, has been helping prosecutors build cases against the traders.   Citigroup, Barclays, JPMorgan and Royal Bank of Scotland Group Plc pleaded guilty in the U.S. in May 2015 to conspiring to rig currency rates.

[March 24 2016 Credit Suisse Group AG triggered $258 million of writedowns 2016 through March 11, after $495 million of losses in the fourth quarter 2015. ]

collateralized_loan_ob

Credit Suisse Group AG announced that a buildup of illiquid trading positions means the bank will probably post a second straight quarterly loss as it unwinds the trades and deepens cuts at that business.   Mark Williams, “Either trades were fraudulent and traders should be fired or senior management should take responsibility for allowing excessive risk-taking to happen.The CEO’s admission that he wasn’t aware of the bank’s exposures to securitized products and distressed debt is “somewhat alarming,”    The stock has tumbled about 39 percent so far this year, almost twice as much as the index.   The Zurich-based lender’s holdings of distressed debts, leveraged loans and securitized products, including collateralized loan obligations, triggered $258 million of writedowns this year through March 11, after $495 million of losses in the fourth quarter, according to a presentation.

[January 31 Barclays, Credit Suisse pay up for ‘Dark Pools’ ]

 Tower Research Capital LLC

Tower Research Capital LLC

 

 

Barclays, Credit Suisse are expected to pay a combined total of $154.3 million o settle federal and state charges that they misled investors in their dark pools and an additional $24.3 million by Credit Suisse in disgorgement to the SEC for executing 117 illegal sub-penny orders out of its dark pool known as “Crossfinder.”.

 

[January 23 2015 High-frequency trading operations listed in complaint against Barclays]
Dark pools , where ‘high frequency trade’ firms traded, accounted for 15 percent of total U.S. volume in the third quarter. New York Attorney General Eric Schneiderman filed his suit against Barclays under the Martin Act, an almost century-old law that gives him broad powers to root out corporate fraud. Barclays was misleading its dark pool customers that it was monitoring and suppressing “predatory” trading by such firms, while simultaneously soliciting business from those firms, according to the complaint.
Almost a year after he made a splash with subpoenas of six high-frequency trading operations, the names of some of these firms, Jump Trading LLC, Chopper Trading LLC and Tower Research Capital LLC, cropped up in documents filed this week in the state court in Manhattan. The firms aren’t defendants, though. They are listed as part of Schneiderman’s proposed updated complaint against Barclays, which ran the private trading venue, or dark pool, where these firms traded.

[January 22 BOE “bully the fix”: wrong to interpret that they were talking about “illegal manipulation”]

Anthony Grabiner, the lawyer who led the probe

Anthony Grabiner, the lawyer who led the probe

A global probe of foreign exchange dealings has exposed cozy relations between the BOE and banks. “The fix” is a benchmark for currencies rates. Traders are executing unnecessarily large transactions to move rates around in their own favor. In March 2014, The Bank’s governor, Mark Carney, told MPs this week that the scandal had the potential to be bigger than the rigging of Libor, which has resulted in big-name banks being fined billions of pounds on both sides of the Atlantic.
The Bank of England’s Oversight Committee commissioned Grabiner to investigate whether BOE staff knew currency traders shared confidential client information with counterparts at other firms to rig key currency benchmarks. His report found the central bank’s chief currency dealer, Martin Mallett, had concerns about the practice and didn’t escalate them, but hadn’t acted “in bad faith.” It was published Nov. 12, the same day six banks were fined $4.3 billion by U.S. and U.K. regulators who found senior dealers colluded with one another to rig currency markets. Traders, some of whom were subsequently fired for their activity, interpreted the central bank’s silence as an indication that it regarded their behavior as acceptable, according to people familiar with the traders’ thinking.
The central bank separately announced that day that it fired Mallett, saying it wasn’t related to Grabiner’s report. Anthony Grabiner, the lawyer who led the probe, refused to comment on Mallett’s dismissal.

Norman took issue with Grabiner’s interpretation of a telephone call in October 2011 between Mallett and an unidentified currency trader that was included in his report.

The trader asked whether trying to “bully the fix” was problematic. “Well that’s market manipulation isn’t it?” Mallett responded.

“Yep absolutely,” the trader said, according to the report. Mallett asked the trader to follow up with him about the practice. The trader never did, and Mallett kept it to himself.

Grabiner then said it was wrong to interpret that they were talking about “illegal manipulation,” and said there were instances where market manipulation could be legitimate.

Norman disagreed, saying it was clear that he was talking about illegal manipulation. He also questioned why Grabiner relied on the written transcript rather than listen to the actual call to hear any nuances in the exchange.
Grabiner said Norman was “wrong” and not equipped to form that judgment, saying that his own interpretation following interviews with Mallett was “right.” No one he spoke with challenged whether the transcripts gave a full picture of the exchanges, Grabiner said, so he didn’t need to hear recordings.
Treasury Select Committee members quizzed, on whether he too readily accepted a former central bank employee’s version of key events. They also questioned the depth of his knowledge of the currency market and how long he spent on the report.

[January 13 Paul Nash arrested by SFO, but not charged, in rigging the $5.3tn-a-day foreign-exchange market]

The Serious Fraud Office, UK’s top fraud prosecutor, has arrested a currency trader Paul Nash in relation to its criminal investigation into whether individuals rigged the $5.3tn-a-day foreign-exchange market, Criminal investigations, including that of the SFO, are ongoing. The arrest is not linked to former traders who were members of a chat room dubbed “the cartel”, according to people familiar with the situation. Nash emigrated to Canada on Christmas Day and has rented out his family home. His arrest was not by appointment, as is typical in such cases, but was an “arrest and raid”
Nash, who has not been charged with any offence, appeared at Westminster Magistrates’ Court on Dec. 23 over variations to his bail conditions. These included that he would reside at a specified address in British Columbia.

 

 

 

November 17, 2014 Britain’s big five will incur another £21bn – with other European banks and US firms taking that total to £45bn.]

“It’s inconceivable that the odour of what was going on did not reach the noses of those at the top.”-t former City minister Lord Myners[Economic Secretary to the Treasury ][Paul Myners, Baron Myners].

“It’s inconceivable that the odour of what was going on did not reach the noses of those at the top.”-t former City minister Lord Myners[Economic Secretary to the Treasury ][Paul Myners, Baron Myners].

So far £150bn in fines and legal costs have already been incurred by big-name banks, according to analysts at Morgan Stanley, who reckon that in the next two years Britain’s big five will incur another £21bn – with other European banks and US firms taking that total to £45bn. Last week’s revelations of the free-for-all culture in the dealing rooms of the City also look set to be repeated soon. Other regulators are still investigating the foreign exchange markets and US attorney general Eric Holder expects his department to finish the investigation “relatively soon” – a development that could lead to both civil and criminal charges. . Some 13 individuals face charges linked to Libor rigging. The SFO’s investigation into the foreign exchange markets is in the early stages; and Chancellor George Osborne on Friday promised resources for action by the Serious Fraud Office.

[November 12 I trust you implicitly :Examples of Misconduct in Private Chat Rooms]
I trust you implicitly

Regulators fined six major banks including Citigroup (C.N) and UBS (UBSN.VX) a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a year-long global investigation.

HSBC (HSBA.L), Royal Bank of Scotland (RBS.L), JP Morgan (JPM.N) and Bank of America (BAC.N) also face penalties resulting from the inquiry that has put the largely unregulated $5 trillion-a-day market on a tighter leash, accelerated the push to automate trading and ensnared the Bank of England.

[November 11 HSBC sets aside £237m for FCA forex investigation , Group pre-tax profits rose to £2.89bn in Q3

HSBC Stuart Gulliver to get 70% pay rise - taking his salary to £4.2m a year [ 25 February 2014]

HSBC Stuart Gulliver to get 70% pay rise – taking his salary to £4.2m a year [ 25 February 2014]

HSBC has set aside £237m to cover the costs of an FCA investigation into the manipulation of foreign exchange markets. “Discussions are ongoing with the FCA regarding a proposed resolution of their foreign exchange investigation with respect to HSBC Bank’s systems and controls relating to one part of its spot FX trading business in London.

“Although there can be no certainty that a resolution will be agreed, if one is reached, the resolution is likely to involve the payment of a significant financial penalty. We continue to co-operate fully with regulatory and law enforcement authorities in the UK and other jurisdictions.”

Group pre-tax profits rose 2 per cent from £2.84bn in Q3 2013 to £2.89bn in the three months to 30 September.

[december 11 2012 U.S. decides HSBC too big to Indict?]

HSBC’s Gulliver and friend

HSBC has agreed to pay $1.9bn in settlement of U.S. money-laundering charges.
State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.

While the settlement with HSBC is a major victory for the government, the case raises questions about whether certain financial institutions, having grown so large and interconnected, are too big to indict.
After months of discussions, prosecutors decided against a criminal indictment, but only after securing record penalties and wide-ranging sanctions.

The HSBC deal includes a deferred prosecution agreement with the Manhattan district attorney’s office and the Justice Department. The deferred prosecution agreement, a notch below a criminal indictment, requires the bank to forfeit more than $1.2 billion and pay about $700 million in fines, according to the officials briefed on the matter. The case, officials say, will claim violations of the Bank Secrecy Act and Trading with the Enemy Act.

Prosecutors found that HSBC had facilitated money laundering by Mexican drug cartels and had moved tainted money for Saudi banks tied to terrorist groups.

On November 11 HSBC said it had “reached agreement with United States authorities in relation to investigations regarding inadequate compliance with anti-money laundering and sanctions laws.” The bank is also expected to reach a settlement over the matter with Britain’s Financial Services Authority, according to a person with direct knowledge of the matter.

November 10, federal and state authorities also won a $327 million settlement from Standard Chartered, a British bank. The bank, which in September agreed to a larger settlement with New York’s top banking regulator, admitted processing thousands of transactions for Iranian and Sudanese clients through its American subsidiaries. To avoid having Iranian transactions detected by Treasury Department computer filters, Standard Chartered deliberately removed names and other identifying information, according to the authorities.

“HSBC has signed a Deferred Prosecution Agreement for breaches of the US Bank Secrecy Act, the Trading with the Enemy Act and assorted money laundering offences. This is in effect putting the bank on probation,” he said.

“But if HSBC had been indicted for these offences, that would have meant that the US government and others could no longer have conducted business with it, which would have been humiliating and highly damaging.”
The bank is the biggest in Europe by market capitalisation, and made pre-tax profits of $12.7bn for the first six months of 2012.