Classic Financial and Corporate Scandals
"Bankers who hire money hungry geniuses should not always
express surprise and amazement when some of them turn around with brilliant,
creative, and illegal means of making money."
Linda
Davies
The quotation is from a speech by the financial
thriller writer on the Psychology of
Risk, Speculation and Fraud, at a conference on EMU in
Amsterdam.
|
Part 1
[ The Credit Crunch |
| Brian Hunter and Amaranth Advisors | John
Rusnak and Allied Irish Banks | Jerome Kerviel and
Société Générale |
| Banco Ambrosiano and the Vatican Bank | Bank
of Credit and Commerce International |
| Nick Leeson and Barings Bank | Kweku
Adoboil and UBS | | Bre-X and Canadian Mining Scandals
|
| Butcher Brothers and the United American Bank | Carousel Fraud |
| Cendant Corp. | Credit Lyonnais |
Toshihide Iguchi and Daiwa Bank |
| The Dot-Com Bubble and Investment Banks | Enron Corp. and Arthur Andersen |
| The Flaming Ferraris | Jardine
Fleming | Martin Frankel | Griffin
Trading Co. |
| Conrad Black and Hollinger International | Harshad Mehta |
| Joseph Jett and Kidder, Peabody & Co. | Liu Qibing and copper futures |
| | Bernard L. Madoff Investment
Securities | Misselling of Financial Products]
Continued in Part
2
The Credit Crunch
- Failure of HBOS linked to “colossal failure of senior management and the Board”, says Banking Commission
- The Parliamentary Commission on Banking Standards has published its Fourth Report - ‘An accident waiting to happen’: The failure of HBOS. 5 April 2013.
-
- HBOS: the bank that couldn't say no
- Banking group HBOS was not driven to point of bankruptcy by the global financial meltdown, but by its own strategy of high-risk lending, over-ambitious growth targets and poor controls, according to a hard-hitting report by the parliamentary commission on banking standards. Guardian, 5 April 2013
-
- Yes, the bankers who robbed us all are criminals. Now let’s throw them in jail!
- An opinion piece by Max Hastings in the Daily Mail following the judgement against Lloyds for its role in the Libor scandal. 29 July 2014.
-
- Lloyds fined £218m over Libor rate rigging scandal
- Lloyds Banking Group has been fined £218m for "serious misconduct" involving the manipulation of the London interbank offered rate (Libor) for yen and sterling and attempts to rig the rate for yen, sterling and the US dollar. BBC, 28 July 2014.
-
- Taxpayers face £500m bill for RBS Libor fraud
- MPs warn of public fury at size of fines for wrongdoing, most of which will go to US watchdogs. The Independent 16 January 2013.
-
- Libor scandal: Seven banks summoned in US probe
- Seven banks, including HSBC and Royal Bank of Scotland, are to be questioned in the US for alleged manipulation of the Libor inter-bank lending rate. BBC, 15 August 2012.
-
- Top executive suppressed report damning Barclays
- Bank boss leaves after hiding criticism of 'revenue at all costs' strategy at US Wealth arm. The Independent, 21 January 2013
-
- Barclays fined for attempts to manipulate Libor rates
- Barclays has been fined £290m ($450m) for trying to manipulate a key bank interest rate which influences the cost of loans and mortgages. The fine is part of an international investigation into the setting of interbank rates between 2005 and 2009. BBC, 27 June 2012.
-
- Goldman decides not to delay bonuses to beat tax
- Goldman Sachs bowed to pressure and decided not to delay bonus payments to benefit from a lower rate of tax, just hours after Bank of England Governor Sir Mervyn King attacked the plans as “depressing”. The Telegraph, 15 January 2013.
-
- Ex-Goldman Sachs director Rajat Gupta guilty of fraud
- A former Goldman Sachs board member has been found guilty of four criminal counts of insider trading by a federal court in New York. BBC, 15 June 2012.
-
- UK Uncut allowed to challenge Goldman Sachs tax deal
- An anti tax-avoidance campaign group has won permission from the high courts to have a "sweetheart" deal between HMRC and the banking giant Goldman Sachs judicially reviewed for its legality. Guardian, 13 June 2012.
-
- Why I Am Leaving Goldman Sachs
- The resignation letter of Greg Smith, Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa. New York Times, March 14, 2012.
-
- Goldman Sachs resignation: Muppet letter is everyone's fantasy
- Many of us have imagined writing a letter of resignation that shakes our bosses to the core, but few have actually done it, and rarely even then has the letter been read by millions. Greg Smith, who quit Goldman Sachs this week, has realised our fantasy. BBC, 15 March 2012.
-
- Goldman bankers get rich betting on food prices as millions starve
- Goldman Sachs made more than a quarter of a billion pounds last year by speculating on food staples, reigniting the controversy over banks profiting from the global food crisis. The Independent, 20 January 2013.
-
-
The great hunger lottery - How banking speculation causes food crises
- In The Great Hunger Lottery, the World Development Movement has compiled
extensive evidence establishing the role of food commodity derivatives in
destabilising and driving up food prices around the world. This in turn, has led to
food prices becoming unaffordable for low-income families around the world,
particularly in developing countries highly reliant on food imports.
-
- Goldman
Sachs handed record $550m fine over Abacus transaction
- US regulators yesterday demonstrated their determination to crack down on Wall
Street's excesses during the subprime mortgage crisis by handing Goldman Sachs a fine
of $550m. Guardian, 16 July 2010.
-
-
Goldman Sachs: the bank that thought it ruled the world
- Goldman Sachs was ‘doing God's work' - but it is now being investigated for
fraud. Daily Telegraph, 19 April 2010.
-
- RBS
'has duty to consider legal action against Goldman Sachs'
- Royal Bank of Scotland directors will be obliged to consider legal action against
Goldman Sachs if the US Securities and Exchange Commission succeeds in its fraud case
against the American banking giant, say lawyers. The Scotsman, 19 April 2010.
-
- Looting Main Street
- How the nation's biggest banks are ripping off American cities with the same
predatory deals that brought down Greece, by Matt Taibbi, Rolling Stone, March 31,
2010.
-
- Wall
Street's Bailout Hustle
- Goldman Sachs and other big banks aren't just pocketing the trillions we gave
them to rescue the economy - they're re-creating the conditions for another crash, by
Matt Taibbi, Rolling Stone, February 17, 2010.
-
- 25 People to Blame for the Financial Crisis
- A special report from Time Magazine.
-
- Iceland: Report of the Special Investigation
Commission
- The Special Investigation Commission (SIC) delivered its report to Althingi on
April 12 2010. The Commission was established by Althingi, the Icelandic Parliament,
in December 2008, to investigate and analyse the processes leading to the collapse of
the three main banks in Iceland.
-
- Anglo Irish Bank Execs Face Trial In Dublin
- Former Anglo Irish Bank bosses, Sean FitzPatrick, Pat Whelan and William McAteer are on trial for their alleged role in pushing the country's finances to the brink of collapse, prompting the bailout and austerity. Sky News 5 February 2014.
-
- The Crisis of Credit Visualized
- A video by Jonathan Jarvis created with the aim of giving form to a complex
situation like the credit crisis by quickly supply the essence of the situation to
those unfamiliar and uninitiated.
-
- The Road to Ruin
- A series of articles in the Guardian where writers look at the real story behind
the economic slump discussing how boom turned to bust, who's to blame, and ways out
of the mess we're in.
-
- The
Global Financial Crisis
- News on developments from the BBC.
-
- The Guardian: Credit
crunch
- News about the crisis from the Guardian.
-
- Banking
Crisis Timeline
- A blow-by-blow account of developments from the Guardian.
-
- Financial crisis
of 2007-2008
- An article from the Wikipedia.
-
Brian Hunter and Amaranth Advisors
- Who's
glad they aren't Brian Hunter?
- An article about the rise and fall of Brian Hunter, star trader at Amaranth.
-
- Hedge fund's $6bn gas
price hit
- Amaranth Advisors, the US-based hedge fund whose investments were hit by a
misplaced bet on gas prices, has seen its losses reach about $6bn. BBC, 21 September
2006
-
John Rusnak and Allied Irish Banks
- How to lose
a billion
- The John Rusnak case is reviewed in detail and compared with those of other
infamous rogue traders such as Nick Leeson, Peter Young and Toshihide Iguchi. William
Leith, the Guardian, October 26, 2002.
-
- "Rogue" AIB trader
pleads guilty to fraud
- The Former currency trader pleaded guilty to one count of bank fraud and agreed
to a reduced sentence in return for helping the investigation into whether other
people were involved in the scandal. BBC, 24 October, 2002.
-
- Allfirst's sale to M&T Bank is completed
- Executives with M&T, AIB and Allfirst claimed that the sale was planned before news of the John Rusnak affair. The Baltimore Sun, April 2, 2003.
-
- Rogue trader missing
after $750m fraud
- Allied Irish Banks (AIB) has named John Rusnak, a US citizen in his 40s, as the
trader at the centre of a suspected $750m (£529m) fraud at its US
subsidiary.
-
- Allfirst rogue trader accused
of costing AIB $750m
- News about the scandal from Radio Telefís Éireann, the Irish
National Public Service Broadcasting Organisation.
-
Jerome Kerviel and Société Générale
-
Jérôme Kerviel will need 177,000 years to repay €5 billion
- Jérôme Kerviel, the rogue French trader sentenced to three years in
jail for losing the bank he worked for €5 billion (£4.4 billion), has been
ordered to repay the full amount despite calculations that it would take him more
than 177,000 years to do so. Daily Telegraph, 5 October 2010.
-
- SocGen trader Kerviel
slammed for 'stratospheric' risks
- Alleged Societe Generale "rogue trader" Jerome Kerviel took "stratospheric" risks
that almost brought down the bank, an ex-colleague told a court. BBC, 10 June
2010.
-
-
Soc Gen trader's 'scapegoat' claim
- Jérôme Kerviel has urged his ex-colleagues at Société
Générale to come forward and give evidence in his defence. He said he
wanted old trader colleagues to come forward as witnesses because he refused to
become "a scapegoat" for what he claims was a much bigger problem and he has written
a book about the case. The Connexion, 3 May 2010.
-
- Jérôme Kerviel case: why is it so rare to see a banker behind bars?
- Jérôme Kerviel's financial folly put him in prison, but others get away with it. The Telegraph, 6 October 2010.
-
-
Fraud Costs French Bank $7.1 Billion
- The French bank Société Générale said Thursday that
it had uncovered “an exceptional fraud” by a trader that would cost it
4.9 billion euros, or $7.1 billion. The fraud had been committed by a trader in
charge of “plain vanilla” hedging on European index futures. New York
Times, January 25, 2008
-
- Rogue trader to cost
SocGen $7bn
- French bank Societe Generale says it has uncovered "massive" fraud by a
Paris-based trader which resulted in a loss of 4.9bn euros ($7.1bn; £3.7bn).
BBC, January 25, 2008
-
Kweku Adoboil and UBS
-
UBS rogue trader Kweku Adoboli jailed over 'UK's biggest fraud'
- Junior City player, 32, sentenced to seven years after dispensing with hedging safety nets and racking up losses of over £1.5bn. Guardian, 20 November 2012.
-
-
UBS 'rogue trader' Kweku Adoboli almost cost the bank £7.4bn, court hears
- A UBS rogue trader who gambled away £1.4billion in the City's biggest ever fraud "believed he had the magic touch" but caused "chaos and disaster" to all around him, the court was told at his trial. The Telegraph, 15 September 2012.
-
-
Rogue trader: Kweku Adoboil was a 'nice guy', says former landlord
- A rogue City trader arrested after losing his bosses a reported £1.3
billion was described as a "nice guy" and a "model tenant" by his former landlord.
Daily Telegraph, 19 September 2011.
-
-
A five-point guide to rogue trading
- In the wake of the UBS Kweku Adoboil affair, everything you need to know about
losing money on an epic scale. Guardian, 19 September 2011.
-
-
Myners: rogue trader scandal shows reform need
- Lord Myners, the businessman turned City minister, used the UBS scandal as the
launch pad for a scathing attack on bankers in the House of Lords. Evening Standard,
16 September 2011.
-
Banco Ambrosiano and the Vatican Bank
Although this series of scandals first came to light in the early 1980s the
Vatican Bank has continued to be dogged by scandal.
- Prosecutors investigate Vatican Bank mafia link
- Anti Mafia prosecutors have asked the secretive Vatican Bank to disclose details of an account held by a priest in connection with a money laundering and fraud investigation. Telegraph, 10 June 2012.
-
- Vatican bank's former president accused of negligence
- The ousted head of the Vatican bank was accused of negligence and leaked documents were published casting doubt on his mental health. Guardian, 10 June 2012.
-
-
Five are cleared in 'God's banker' case
- The death of Roberto Calvi, an Italian banker found hanging from Blackfriars
Bridge in London 25 years ago remains shrouded in mystery after a court in Rome
cleared five people accused of luring him to his death. Daily Telegraph, 7 June
2007.
-
- Four charged over
Calvi killing
- Four people have been charged with murder over the 1982 London death of Italian
banker Roberto Calvi. BBC, 18 April 2005.
-
- Mafia squad probe Calvi bag
theft
- Italy's anti-Mafia police are looking into the theft of files from the UK
coroner, Paul Matthews, who is re-examining the death of Roberto Calvi. BBC, 4 May
2004.
-
- Four go
on trial for murder of God's banker
- More than 20 years after the death of the banker Roberto Calvi was dismissed as
suicide, four people, including a jailed Mafia boss, have gone on trial in Rome,
charged with his murder. Guardian, March 17 2004.
-
- Police
investigating murder of God's Banker
- Detectives investigating the murder of "God's banker" Roberto Calvi, have
discovered more than $70 million hidden in a Bahamian bank. The money is believed to
be connected to the collapse of the Banco Ambrosiano and is thought to be the
proceeds of Mafia drugs deals. The Scotsman, 18 February 2004.
-
- Calvi bank's
$70m traced
- Investigators probing the death of Roberto Calvi are close to seizing $70 million
missing from the collapse of Banco Ambrosiano. The Observer, December 14, 2003.
-
-
Key witness held on Calvi
- Police have arrested Odette Morris, the woman who provided an alibi for Flavio
Carboni who has been charged with Calvi's murder. Evening Standard, 10 December
2003.
-
-
A son's quest for truth
- Carlo Calvi has spent over two decades trying to get justice for his murdered
father. Evening Standard, 7 October 2003.
-
- 'God's banker'
death case reopened
- Italian prosecutors have concluded the Mafia murdered the Italian banker, Roberto
Calvi, who was found dead more than 20 years ago, and have named four people
suspected of carrying out the killing. BBC, 24 July 2003.
-
- New
clue turns up in 'God's banker' death
- Italian investigators have discovered a safety deposit box belonging to Roberto
Calvi some 20 years after "God's banker" was found hanging from scaffolding under
Blackfriars Bridge in London. The Guardian, October 14, 2002.
-
- New tests 'say
Calvi was murdered'
- Long-awaited forensic tests into the death of Vatican banker Roberto Calvi -
found hanging from a bridge in London in 1982 - are reported to show he was murdered.
BBC, 19 April 2002.
-
- Ban looms
over Vatican bank movie
- The film God's Bankers (I Banchieri Di Dio) based on the death of financier
Roberto Calvi, could be pulled from cinemas over claims it slanders Flavio Carbonim
an Italian businessman. BBC, 27 March 2002.
-
- I Banchieri di Dio
- Information about the film from the Internet Movie Database.
-
- Who Killed
Calvi?
- An essay by Edward Jay Epstein.
-
- Operation
Gladio
- by David Guyatt. Claims that there were links between the Calvi affair and
Operation Gladio, a joint project of the US and British secret services to set up a
Europe-wide network of anti-communist guerrillas who would fight behind the lines in
the event of a Soviet invasion.
-
- Exhumation of
Italian banker's body
- The remains of the prominent Italian banker, Roberto Calvi, were exhumed on 16
December 1998, 16 years after his death, to try and determine whether or not he had
been murdered. BBC, 16 December 1998.
-
- DNA
May Solve Banker's Murder
- The latest investigation into the death of Roberto Calvi has produced evidence
that could prove the Italian banker was murdered, and possibly even identify his
assassin. The Guardian, December 30, 1998.
-
-
Who is Licio Gelli? Who is Licio Gelli? A Monster Of The Times
- An article about Licio Gelli who is closely associated with the Vatican Bank.
Toronto Street News, June 8-21, 2007.
-
- Vatican Bank Claims
- Allegations concerning the Role of the Vatican Bank in WWII. Among the
allegations is the claim that the Vatican, through its banking system, laundered loot
valued at hundreds of millions of dollars taken from Serb, Jewish, Ukrainian, and
other victims of the Nazis and their Croatian supporters.
-
-
Nazi-Era Victims Demand Army, CIA Release Documents on Vatican
- This is in connection with the class action lawsuit against the Vatican Bank and
the monastic Franciscan Order. CNS, September 04, 2000.
-
Bank of Credit and Commerce International (BCCI)
- Bank to launch
massive costs claim against BCCI liquidators
- The Bank of England will begin one of the biggest claims for costs in English
legal history when it demands up to £80m from liquidators of the Bank of Credit
and Commerce International. Jill Treanor, the Guardian, January 30, 2006.
-
- BCCI liquidators drop
£1bn case
- Liquidators for BCCI have dropped their £1bn ($1.76bn) damages case against
the Bank of England. BBC, 2 November 2005.
-
- Bank of England accused
over BCCI
- Bank of England officials "shut their eyes and turned away" instead of clamping
down on fraudulent activity at BCCI, the High Court has been told. BBC, 13 January
2004.
-
- BCCI
settlement costs top $1.2bn
- Creditors of Bank of Credit and Commerce International are to receive another
$1bn (£600m). The cost of the 11-year liquidation has topped $1.2bn. The
Guardian, May 15, 2003.
-
- Treasury in
the dock over BCCI
- Treasury officials are bracing themselves ahead of a High Court decision which
could force them to release secret papers about the Government's role in the collapse
of BCCI. The Observer, May 12, 2002. (According to a report in the Mail on Sunday, 5
May, that is not available on the web, the authorities turned a blind eye to fraud at
the BCCI for political and intelligence gathering reasons).
-
- Bank faces £1bn
law suit
- The Bank of England is to be sued for up to £1bn by the liquidators of the
collapsed Bank of Credit and Commerce International (BCCI). The BBC, 23 March,
2001.
-
- The Sandstorm
Report
- This is the report of an official investigation into the BCCI affair that the
British government refused to publish. Along with other material on BCCI, the
Sandstone Report is made available on the web site of AABA, the Association for Accountancy & Business
Affairs.
-
- BCCI
Liquidators Sue Sheikh for £289m
- Liquidators are suing the Sheikh of Sharjah for a debt they claim he owes the
failed bank. The Guardian Wednesday August 11, 1999.
-
- Key
Player in BCCI Fraud Loses Appeal
- History's biggest convicted commercial fraudster, Abbas Gokal, lost his appeal
against his April 1997 conviction on charges involving £750 million. Friday
March 12, 1999.
-
- Accountants in
BCCI Net
- The role of accountants Price Waterhouse in auditing for four years the books of
scandal-hit Bank of Credit and Commerce International is under investigation.Guardian, 8 January 1999.
-
-
Bank of Crooks and Criminals International
- An outline of the main allegations that led to the bank being closed down with particular reference to its dealings with the US Government.
-
- Congressional
Report on the BCCI Affair
- A Report to the Committee on Foreign Relations, United States Senate by Senator
John Kerry and Senator Hank Brown, December 1992.
-
- Crooked
Banks
- Allegations of CIA involvement with BCCI and other banks.
-
Nick Leeson and Barings Bank
The collapse of Barings Bank was probably the most discussed financial scandal of
the 1990s. The bank was subsequently taken over by the Dutch-based ING Bank.
Bank of England
- Conclusion of the Bank of
England Report on the Collapse of Barings
-
IFCI Risk Institute
- Not Just One Man - Barings
- A detailed case study by the IFCI Risk Institute. It includes data on the
positions taken by Nick Leeson, and a discussion of the lessons that can be drawn
from the case.
-
Numa Financial Systems
- The Collapse of Barings
Bank
- a collection of links to articles on the scandal maintained by Numa Financial Systems.
-
US Commodity Futures Trading Commission Response
- Status Report on
Regulatory and Self-Regulatory Responses to the Barings Bankruptcy
- Article by Joseph B. Dial, Commissioner, Commodity Futures Trading
Commission.
-
Other Articles on Barings
- Deloitte
& Touche negligent in Barings audit, rules judge
- The high court has ruled that accountancy firm Deloitte & Touche was
negligent in its auditing of Barings, the London merchant bank brought down by rogue
trader Nick Leeson in 1995. Guardian, June 12, 2003.
-
-
Coopers fined in Barings disciplinary case
- An appeal tribunal for the profession's senior watchdog today upheld its findings
against Coopers & Lybrand for the firm's role as auditor in the collapse of
Barings. Accountancy Age, 20 April 2002.
-
- Barings: A Random Walk
to Self-Destruction
- This article argues that regulators and human nature do not always coincide in
their objectives. In the old days, speculators were protected by the twin devils of
fear and greed - the gambler's emotions. Computers do not know fear or greed, they do
not have any common sense, either. Anyone trading off a screen soon loses touch with
reality and common sense. The article appeared in Scandals in Justice which regularly publishes online
articles attacking the British legal system.
-
- Leeson
Scandal 'could happen again'
- A report from the BBC following the premier of the film Rogue Trader.
-
- Leeson paid
£61,000 for speech
- The former Barings trader was paid $100,000 (£61,000) to speak at a
business conference in the Netherlands, BBC Friday 29 October 1999.
-
The central figure in the debacle has written a book about the Barings affair.
Rogue
trader by Nick Leeson.
Locking the Stable Door After the Horse has Bolted
Whenever a scandal like the Barings debacle is uncovered there is a demand that
legislators and regulators should ensure that nothing similar occurs again. All too
often such action is merely a case of locking the stable door after the horse has
bolted. Could frauds on a massive scale be foreseen? Regulators are hardly likely to
answer yes because that would undermine their excuses for their failures.
However, immediately after the news of the Barings affair broke, Allan
Fotheringham writing in the leading Canadian news and current affairs magazine
Maclean's made the following points.
Author Linda Davies has proven a
point made years ago by Marshall McLuhan, who said that artists can warn us of future
disasters. Three years ago, Davies wrote the novel,
Nest of Vipers,
about a computer whiz-kid who decides to exploit the system and make tons of money
while being employed as a mole by the Bank of England. She wrote what 28-year-old
Nick Leeson accomplished in Singapore last week. Leeson has been able to upset world
economies more than J. P. Morgan, the Vanderbilts, or the Rothschilds ever
could.
See also the Psychology of Risk,
Speculation and Fraud the text of a speech by Linda Davies at the European Research
Center's annual Financial Panel, Amsterdam, 11 June 1997.
Bre-X and Canadian Mining Scandals
- The
Archived Official BRE-X website
- The official website of the company has been preserved by the Wayback Machine
which archives a huge number of internet sites.
-
- BRE-X :The Inside Story by Diane Francis.
- A description of her book from the website of Diane Francis
-
- On the Road to Busang
with BRE-X
- Brief notes from Business Week magazine on some of the big-name players that had
close dealings with Bre-X Minerals.
-
- Stranger
than Fiction: The Bre-X Gold Scandal
- Recordings of items about BRE-X in TV and radio programmes from the CBC
archives.
-
- Bre-X Survivor
Clarifies Why He Invested
- John Kutyn explains why he bought BRE-X shares and recommended them to
others.
-
- Gold mine scandal tales
only scratch the surface
- More reviews of books on the scandal.
-
- Canadian
Court Puts Bre-X in Bankruptcy
- Bre-X Minerals Ltd. was put into bankruptcy by the Court of Queen's Bench of
Alberta.New York Times, November 6, 1997.
-
- Bre-X Class Action
- Case Summary from Sutts Strosberg LLP acting on behalf of BRE-X shareholders who
were residents of Canada.
-
- The Deloitte &
Touche Inc's Forensic Investigative Associate Inc. (FIA) Report
- The full text of a report on how the mineral samples were tampered with.
-
- Bre-X's Busang
site full of red flags: expert
- Graham Farquharson, president of Strathcona Mineral Services Ltd, the firm that
produced a detailed report on the tampering process, claimed that questions should
have been raised much earlier. May 30, 1998.
-
- Mining Watch: More
Precious than Gold.
-
The notorious Vancouver Stock Exchange (VSE), is synonymous with the financing of
junior mining companies around the world. Since the late seventies, the VSE has
been infamous as a high risk, scam-ridden institution that has been called "the
Sodom and Gomorrah of modern day financial markets." That description, by Equity
Magazine, is quoted in this article at the Mining Watch website.
For a treatment in fiction of the Vancouver Stock Exchange
financing a diamond deal see Wilderness of
Mirrors.
The Butcher Brothers and the United American Bank
- Whirlwind
- The website of Sandra Lea, the author of the authoritative book on the rise and
fall of the multi-state banking empire, Whirlwind: the Butcher Banking
Scandal. A story of unbridled lust, greed and insatiable passions, the book has
been described as a cross between Dallas and The Godfather. Sandra
Lea's website contains additional information about the Butcher brothers scandal, as
well as information from the book and where to order it.
-
- Schledwitz v. United
States
- This ruling from the Court of Appeals in 1999 has background information about
the Butcher brothers and the collapse in 1983 of the United American Bank of
Knoxville in what was the fourth-largest bank failure in U.S. history. After their
banking empire collapsed Jake and C.H. Butcher were convicted of fraud.
-
Carousel Fraud.
-
Q&A: the fraud carousel
- An explanation of how the fraud works. Simon Newark, Best Practice 20 July
2006.
-
-
Carousel fraud bill to reach £5bn
- VAT carousel fraud will cost the cost the British government at least £5bn
this year, according to a study by mid-tier firm Grant Thornton. Accountancy Age, 4
Dec 2006.
-
- Treasury sees a rise in
VAT fraud
- The UK Treasury has said it lost between £2bn and £3bn in 2005-06
because of carousel fraud. BBC, 6 December 2006.
-
Cendant Corp.
- Massive Financial Fraud at
CUC and Cendant Corp.
- The Securities and Exchange Commission brought civil and administrative fraud and
other charges against seven former officials of CUC International Inc. (CUC) and
Cendant Corporation for their involvement in a massive financial fraud that caused
billions of dollars in losses for investors. June 14, 2000.
-
- Cendant pays
$3.2 billion to clear fraud settlement
- Cendant Corp., the marketing and franchising company battered by accounting
problems in 1998, has agreed to pay $3.2 billion to settle a shareholder lawsuit
accusing it of fraud. May 28, 2002.
-
Credit Lyonnais
- Credit Lyonnais' Tangled Tale
- A timeline of the developments involving Credit Lyonnais and Executive Life.
Business Week, July 30, 2001.
-
- Credit Lyonnais probe
widens
- The US financial authorities are considering prosecuting French bank Credit
Lyonnais for conspiracy and money laundering, BBC, 6 September 2001.
-
- A
California Law Suit Makes Paris Tremble
- An article from Salon magazine about the legal problems of Credit
Lyonnais. February 22, 2000.
-
- Trichet
trial could halt ECB handover
- A magistrate in Paris has ruled that Jean-Claude Trichet, governor of the Bank of
France and heir-apparent to European Central Bank president Wim Duisenberg, must face
the courts over events at the then state-controlled Credit Lyonnais in the early
1990s. The Guardian, 17 July 2002.
-
- How an Italian Thug Looted MGM, Brought
Credit Lyonnais to its Knees, and made the Pope Cry
- An article about Giancarlo Parretti.
-
- The Bank Scandal That Keeps Growing
- An article by David McClintick outlining developments in the troubled bank.
-
- Financiers
flamboyants, contribuables brules
- par Ibrahim Warde, Le Monde Diplomatique, Juillet 1994. Article in French about
how deregulation has led to scandals in various countries, e.g. Credit Lyonnais in
France and Banesto in Spain.
-
Toshihide Iguchi and Daiwa Bank
- Toshihide Iguchi - Epilogue to My Billion Dollar
Education
- No English language edition of Toshihide Iguchi's book My Billion Dollar
Education has been published. This epilogue to it is published her with his
permission.
-
- Bank Bosses Pay $775m
Fraud Charge
- A group of senior executives at Daiwa have been ordered to pay more than $750m
(£535m) in compensation for losses incurred during fraudulent trading. BBC, 20
September, 2000.
-
- Criminal Complaint &
Indictment Against Daiwa Bank
- The official account of the prosecution's case against Daiwa Bank in the
Toshihide Iguchi affair.
-
- Daiwa Bond Trader Puts His Spin on Scandal
- Details of claims by Toshihide Iguchi in his book.
-
The Dot-Com Bubble and Investment Banks
- Swiss
banks reach deal with US regulators
- Leading Wall Street brokerages, including the investment arms of
Switzerland’s two biggest banks, have reached a settlement with US regulators
over charges of issuing biased stock research.
-
-
Deal clears path for Quattrone to reconstruct banking career
- Frank Quattrone has won a deal from prosecutors in a New York that means an end
to his legal troubles, clearing the way for him to return to the investment-banking
career that had made him one of Wall Street's most powerful technology bankers.
Seattle Times, August 23, 2006.
-
- Quattrone
gets 18 months in prison
- Frank Quattrone, who rose to investment banking stardom during the dot.com boom,
has been sentenced to 18 months in a federal prison and two years probation for
obstructing justice and witness tampering. CNN Money, September 8, 2004.
-
-
Star US banker faces jail after guilty verdict
- Frank Quattrone, one of the most high-flying investment bankers on Wall Street
during the dotcom boom, came crashing to earth when he was found guilty of
obstruction of justice. Guardian, May 4, 2004.
-
- Inside Frank Quattrone's Money Machine
- The rise and fall of the high-tech investment banker who was an architect of
Silicon Valley's financial culture. Business Week, October 13, 2003.
-
- Star of
dotcom boom is arrested
- The first criminal charges were brought yesterday against a Wall Street banker
for actions during the stock market bubble when Frank Quattrone, formerly of Credit
Suisse First Boston, was arrested for obstruction of justice. Guardian, April 24,
2003.
-
- Merrill
Lynch investment scandal
- The role of investment banks in recommending that investors bought shares in
companies which, allegedly, the analysts were privately describing as junk.
-
-
Schadenfreude for Eliot Spitzer, fallen crusader
- The "sheriff of Wall Street" admits involvement in a call-girl scandal. Daily
Telegraph, 11 March 2008.
-
- Wall Street's Top Cop
- Time Magazine chose Eliot Spitzer, the New York attorney general, as its Crusader
of the Year 2002.
-
Enron Corp. and Arthur Andersen
- Enron - the Play
- A play by Lucy Prebble tells the story of Enron from the perspective of a former
employee.
-
-
Skilling Sentence Shows Enron Changed Everything
- An article by Ann Woolner for Bloomberg about the significance of the 24 year
sentence handed down to Jeffrey Skilling.
-
- The Fall of Enron
- A detailed account of the debacle and the main characters in the story. Business Week, December 16, 2001.
-
- Enron Email Dataset
- The corpus contains a total of about 0.5M messages, mostly from senior management
at Enron. This data was originally made public, and posted to the web, by the Federal
Energy Regulatory Commission during its investigation.
-
- British bankers
to face Enron charges
- Three British bankers will be sent to the United States to stand trial in
connection with the collapse of Enron even though the offense of which they are
accused was committed in the UK and the United States has prevented people wanted in
connection with IRA terrorist offences from being extradited to Britain. Guardian,
June 27, 2006.
-
- Three win Enron trial extradition reprieve
- Three Natwest bankers facing extradition to the United States for alleged
involvement in the Enron scandal haveb been given permission by the High Court to
challenge their treatment by the Serious Fraud Office. Scotsman, 8 April 2005.
-
- UK bankers face extradition in Enron case
- Three former NatWest bankers, Gary Mulgrew, Giles Darby and David Bermingham,
should be extradited to the US to face trial over Enron-related fraud charges, a
judge has ruled. Guardian, October 15, 2004.
-
-
My life with the Enron high-rollers
- Robert Kelsey, author of the novel The Pursuit of Happiness: Overpaid,
Oversexed and Over There, included thinly-disguised portraits of the three former
Greenwich Nat West bankers charged with siphoning off £4.8m from their
employer. Evening Standard, 12 July 2002.
-
- No
business as usual after "perfect storm" of Enron scandal
- A wide-ranging review in the aftermath of Kenneth Lay's indictment. Seattle
Times, July 11, 2004.
-
- Guardian Special
Reports: Enron
- A directory of articles from the Guardian on Enron.
-
-
Fraud-charge trio fight extradition
- Three London-based former NatWest investment bankers should be extradited to the
US after taking part in a $20m (£11m) Enron-related scam to defraud their
former employer, a court was told. Evening Standard, 21 June 2004.
-
- Enron
Traders Caught On Tape
- When a forest fire shut down a major transmission line into California, cutting
power supplies and raising prices, Enron energy traders celebrated. CBS June 1,
2004.
-
- The Hijackers of
Harvard - a name and address
- An article about Herbert S. "Pug" Winokur, Chairman of the Enron Finance
Committee who claims he was misled by Enron management.
-
- Bankers charged over
Enron
- Four former Merrill Lynch bankers have been charged with taking part in the
securities fraud at the energy giant. BBC, 18 March 2003.
-
- Enron energy trader
pleads guilty
- The former head of Enron electricity trading has pleaded guilty to a charge of
conspiracy to commit fraud for his part in manipulating California's energy market to
drive up power prices. BBC, 17 October, 2002.
-
- The
curse of Enron
- Enron is the most infamous and mind-boggling financial scandal ever seen. It has
decimated the money markets more effectively than the best efforts of Osama bin
Laden, Saddam Hussein or even Norman Lamont. The Independent, 25 August 2002.
-
- As Enron scandal spreads, US starts to question cash for influence culture
- A report on the political implications of the Enron debacle. The Guardian,
January 16, 2002.
-
- The Enron Black Magic
- The first of a number of articles from Skolnick's Report.
-
- A final
accounting
- Articles from the Chicago Tribune on the problems afflicting Arthur Andersen
since its involvement with Enron.
-
- Durant's
Big Scam : The Transcontinental Railroad and Enron
- In this January 2003 essay, New Yorker financial columnist James Surowiecki
investigates the Crédit Mobilier scandal behind the financing of the Union
Pacific railroad, and compares it to the Enron scandal nearly a century and a half
later.
-
The Flaming Ferraris
Because of the relatively small sums involved this is unlikely to go down in history
as a classic financial scandal but it is one that in February and March 1999 received
plenty of publicity following reports that a member of the team had been involved in
illegal trades in the Swedish stock market.
- Securities and Futures
Authority Disciplinary Action
- The report on three of the Flaming Ferraris.
-
- Archer son lied to cover his tracks
- The Securities and Futures Authority found that Mr Archer, along with Adrian Ezra
and David Crisanti, lacked the integrity to work in the City. Guardian July 28,
2001
-
- Flaming Ferraris sacked
- James Archer, whizz-kid son of Lord Archer, the millionaire novelist, was sacked
along with two of his colleagues by Credit-Suisse First Boston, the investment bank,
for their role in an alleged attempt to manipulate share prices on the Swedish stock
exchange. Guardian, March 6, 1999.
-
- How
'Flaming Ferraris' burned their bridges
- The five 'Flaming Ferraris', the world's most successful share traders, based
their reputation on a simple publicity stunt. Observer, February 28, 1999.
-
Jardine Fleming
- Jardine Fleming's Rogue Trader Scandal: Time Line
- An account of the Colin Armstrong affair and its effects on Jardine Fleming. 9 September 1996.
-
Martin Frankel
- Court Upholds 17-Year Sentence For Insurance Co. Looting
- Martin Frankel's 17-year prison sentence for looting $209 million from seven U.S. insurance companies was upheld by the federal appeals court in Manhattan. October 25, 2011.
-
- Guilty plea from
$200m fraudster
- Martin Frankel pleaded guilty to 24 federal charges including racketeering,
securities fraud and conspiracy. BBC, 16 May, 2002.
-
- The Pretender
- Information based on the book by the Wall Street Journal reporter Ellen Joan
Pollock on how Martin Frankel fooled the financial world and led the Feds on one of
the most publicized manhunts in history. The book is also available from Amazon.com.
-
-
Does Frankel's journal provide map to missing millions?
- An article from the Toledo Blade about the efforts to find the money taken by
Martin Frankel. May 6, 2001.
-
Griffin Trading Company
- Derivatives
firms shut down
- The UK's Securities and Futures Authority (SFA) forced two firms to close down
after John Ho Park lost at least £6.2m, in the biggest trading scandal to hit
the City of London since Nick Leeson broke Barings Bank.
-
Conrad Black and Hollinger International Inc.
- Conrad Black
- On July 13, 2007, former media mogul Conrad Black was found guilty on three
counts of fraud and one count of obstruction of justice.
-
- Black
Hole
- An editorial about the findings of the internal investigation into financial
malpractice within Hollinger conducted by Richard Breeden, a former chairman of the
US securities and exchange commission. There are links to many other Guardian
articles on Conrad Black and Hollinger. Guardian, September 2, 2004.
-
- Walter Mitty life
of media magnate turned robber baron
- An article about the career of Conrad Black. The Scotsman, 2 September 2004.
-
Harshad Mehta
- "Big
Bull" Harshad Mehta dead
- The man accused of India's biggest stock market scam died on 31 December
2001.
-
- How Harshad Mehta did
it again
- An outline of the long-running Indian stock market scandal of the 1990s by
Sucheta Dalal.
-
- Sucheta Dalal's Website
- Sucheta Dalal is the journalist who helped to expose the Harshad Mehta scandal
and she is the author of The Scam, a book on it. Her article 10 years of financial
scams puts that case in perspective.
-
Joseph Jett and Kidder, Peabody & Co.
- Wall Street
Lynching
- The story of Joseph Jett, the man falsely accused of bringing down Kidder,
Peabody & Co.
-
- Jett and Kidder Peabody
- A series of articles on the Jett-Kidder Peabody bond trading case by Steven
Huddart, Smeal College of Business, Penn State University.
-
- GE's Investment
in Kidder Finally Pays Off
- A Wall Street story that began in the 1980s concluded in December 2000 with the
buyout of PaineWebber by the Swiss investment bank UBS.
-
Liu Qibing and copper futures
- China's copper crisis
- Chinese authorities have rejected reports of any link with Liu Qibing wThe story sounded more appropriate for a spy novel than a sober financial broadsheet: rogue copper trader goes missing, as the Chinese government denies he ever worked for it. Yet in this case, truth has turned out to be at least as strange as fiction. Liu Qibing, a trader for China's State Reserve Bureau (SRB), which accumulates stockpiles of commodities for the nation's needs, has disappeared, leaving his employers on the hook for massive short positions in copper on the London Metal Exchange (LME).ho was
said to have worked for Beijing but vanished after making wrong bets on copper
futures contracts that could potentially cost hundreds of millions of dollars. The Economist 18 November 2005.
-
-
Spotlight on Beijing as copper trader goes missing
- Liu Qibing, a copper trader for a secretive, high-level Chinese government agency
has gone missing. The Standard, November 16, 2005.
-
Bernard L. Madoff Investment Securities
-
Madoff aides plead not guilty to charges
- Three of Madoff's employees plead not guilty to a litany of criminal charges.
Daily Telegraph, 25 March 2010.
-
- Bernard Madoff gets 150 years in prison
- Bernard Madoff was sentenced to the maximum term of 150 years in prison for the
biggest swindle in the history of Wall Street. Los Angeles Times, June 30, 2009.
-
- The 17th
Floor, Where Wealth Went to Vanish
- The epicenter of what may be the largest Ponzi scheme in history was the 17th
floor of the Lipstick Building, rising 34 floors above Third Avenue in Midtown
Manhattan. The New York Times, December 14, 2008.
-
-
British banks losing billions to ‘one big lie’ in biggest ever
fraud
- The eye-popping scale of what is being billed as the world’s largest
swindle has become apparent as wealthy investors and banks around the world emerged
as the victims of Bernard L. Madoff. The Times, December 16, 2008.
-
-
Madoff fall-out spreads worldwide
- Banks around the world have revealed their exposure to Maddoff's firm. Financial
Times, December 15, 2008.
-
Misselling of Financial Products
- The Financial Ombudsman - Mis-Sold Payment Protection Insurance
- Advice from the Financial Ombudsman Service on how to complain if you think that you were mis-sold payment protection insurance.
-
- RBS admits thousands of SMEs were sold interest rate swaps
- The Royal Bank of Scotland has broken ranks with its high street peers to reveal that it sold controversial interest rate swaps to thousands of small businesses. Telegraph, 27 March 2012.
-
- Banking industry gives up
on PPI mis-selling battle
- The banking industry has abandoned a legal fight over the mis-selling of payment
protection insurance (PPI). Barclays said it had set aside £1bn to pay
compensation, and HSBC £269m, while RBS added £850m to the £200m it
had already paid or provided for. The previous week Lloyds Banking Group made a
£3.2bn provision for possible claims.BBC, 9 May 2011.
-
- PPI
Reclaiming Guide: £1,000s for missold loan insurance
- The misselling of expensive Payment Protection Insurance (PPI) has been rife.
This is a step-by-step guide, including free templates, to reclaiming loan
insurance.
-
-
Go to Part 2 of
Classic Financial Scandals
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