Bankrupt Banker

six suspects in the Dubai Islamic Bank fraud case will be deported

Six people convicted in a fraud and embezzlement case have been sentenced to ten years each and fined Dh1.8 billion, the amount they are accused of embezzling from Dubai Islamic Bank (DIB). The Dubai Court of First Instance on Wednesday found the six defendants — including two Britons, an American and a Turk, all businessmen, and two former DIB executives, both Pakistanis — guilty of embezzling Dh1.8 billion from DIB. Pronouncing the primary judgment in the biggest graft case to be heard in court since 2009, Presiding Judge Fahmi Mounir Fahmi said all the convicts will be deported after undergoing their punishments. The charges against the defendants ranged from embezzling public funds [DIB's money], deliberately helping others to embezzle public funds, inflicting intentional loss to the government and its interests, and forging unofficial documents and using them to gain unlawful profits. Acquittal A 59-year-old British businessman, A.F., was acquitted of charges of aiding and abetting the defendants. DIB's former financing department manager, U.H., 39, and his deputy, R.U., 50, and an American, Z.U. (who is at large) were additionally fined Dh7.2 million. They were also ordered to jointly repay DIB that same amount [Dh7.2 million] after the court convicted U.H. and R.U. of allowing Z.U. to embezzle the funds from DIB. The three remaining defendants are two British businessmen, C.M. (49), R.L. (55), and A.I. (37), of Turkish nationality [who remains at large]. Compensation "The court has also ordered all the defendants [except A.F.] to jointly pay Dh200,000 in temporary compensation to DIB," Presiding Judge Fahmi said upon pronouncing the judgment in courtroom four on Wednesday. The primary sentence remains subject to appeal within 15 days. A.F.'s lawyer Salah Beloushi argued that the accusations against his client were unsubstantiated. He contended that prosecutors had failed to corroborate their charges with firm evidence against his client. DIB's lawyer Hassan Arab, of Al Tamimi and Company, said the defendants established a number of bogus companies and forged documents of bogus transactions before submitting them to DIB to finance their projects. Dr Habib Al Mulla, U.H.'s lawyer, argued that prosecutors had added new charges but failed to heed an earlier jury's call for a fresh investigation to establish if there were any new suspects. C.M. earlier exclaimed in court: "DIB has been repaid the amount [Dh1.8 billion] twice. Yet they are still claiming it for the third time." His lawyer Abdul Aziz Al Matroushi contended that witnesses [except the Financial Control Department's director] had testified that the bank did not incur any loss. R.L.'s lawyer Yousuf Al Ali asked the court to dismiss the case citing jurisdictional issues. Samir Gargash, R.U.'s lawyer, contended that her client had no connection to the forged receipts and transactions and hence asked the court to acquit him.

six suspects in the Dubai Islamic Bank fraud case will be deported

Six people convicted in a fraud and embezzlement case have been sentenced to ten years each and fined Dh1.8 billion, the amount they are acc...

The Palm Beach mansion Conrad Black used to secure bail throughout his trial on fraud and obstruction of justice charges sold for $23.1 million (U.S.) this week.

The Palm Beach mansion Conrad Black used to secure bail throughout his trial on fraud and obstruction of justice charges sold for $23.1 million (U.S.) this week. Black and his wife, Barbara Amiel, moved out of the mansion a few days ago, said Paulette Koch, the broker who represented the buyers. A young family from California was settling into the house Thursday night, she said, adding she didn’t know where the former media mogul now lives. Black is out on bail awaiting resentencing after serving two years of a 6½-year term for fraud and obstruction of justice. According to bail conditions, Black cannot return to Canada. With the sale of the Palm Beach mansion, the couple’s heavily mortgaged Bridle Path mansion in Toronto is all that’s left of their former residences, which included homes in New York and London. When Black was arrested in 2005 on charges that he helped spearhead an $83.8 million (U.S.) fraud at Hollinger International Inc., a portion of his $20 million bond was secured through equity in the Palm Beach mansion. Prosecutors tried unsuccessfully to have his bail revoked, arguing that Black misreported the amount of a Canadian tax lien on the Florida home and failed to report that his wife was part owner of the property. According to the Palm Beach Daily News, the five-bedroom, six-bathroom, British Colonial-style house has been through a series of deed transfers since February 2010. First, Black transferred ownership to a company called Blackfield Holdings LLC using a $11.6 million warranty deed, which specified that the transfer was in return for the cancellation of a $10 million debt, plus interest and payments due, secured in a 2005 mortgage to Conrad Black Capital Corp. by Laminar Direct Capital LP of Houston. The mortgage was then held by Plainfield Specialty Holdings II before transfer to LJC Property Holdings LLC, through which the home was sold to Koch’s clients. The transfers allowed Black to maintain his interest in the house. Koch said the home was sold with a clean title.

The Palm Beach mansion Conrad Black used to secure bail throughout his trial on fraud and obstruction of justice charges sold for $23.1 million (U.S.) this week.

The Palm Beach mansion Conrad Black used to secure bail throughout his trial on fraud and obstruction of justice charges sold for $23.1 mill...

the big banks are misleading the public

Banks are misleading the public about how much money they are lending to small businesses, the Business Secretary said yesterday. High-stree...

Barclays Bank shareholders dished out a strong protest against pay plans for Bob Diamond

Barclays Bank shareholders dished out a strong protest against pay plans for Bob Diamond and other top executives at the bank's annual meeting yesterday. Including abstentions, 11 per cent of voters withheld support for its remuneration report, with rebellions against two specific bonus plans. The unrest came as the bank announced a U-turn over its controversial move in 2009 to transfer toxic assets to a fund staffed by former Barclays investment bankers. Barclays will buy back £6bn of assets and pay the Protium fund's managers $83m (£50m) to get out of a 10-year management agreement originally priced at $40m a year. The deal reverses a complex manoeuvre that was attacked for its accounting trickery in getting the illiquid assets off Barclays' books. "It was a transaction that was necessary back in 2009," said Chris Lucas, Barclays' finance director. "External factors have changed quite significantly and we now have the best way of going forward." He denied Barclays had come under pressure from regulators to reverse the deal, but said that new rules meant Barclays had to allot more capital to the loan it made to Protium. He added that Barclays had always said the assets – mainly credit securities – were good quality, and that demand for them had returned. The bank announced falling income at its key Barclays Capital investment bank for the first quarter, but said it was comfortable with forecasts for about £7bn annual profit. The shares fell almost 5 per cent to 287.5p. At Barclays' heated annual meeting in London, shareholders accused Mr Diamond, who took over as chief executive this year, and other bosses of paying themselves big bonuses while investors lose out on the value of their shares and dividends. One investor said the dividend on his 40,000 shares had fallen to 20 per cent of the £13,000 he got before the bank cut it during the crisis. "I fear directors and senior staff will continue to treat small shareholders of the business as a cash cow," he said. Another said the dividend supported his family of nine and compared his plight with that of Mr Diamond, who was paid a £6.5m bonus last year. Barclays has tried to win over investors with a pay plan that pays bonuses in deferred securities linked to the bank's performance and swaps basic shareholder return for measures linked to its capital strength and criteria such as customer satisfaction. But the revamp has divided shareholders, while some investors have bristled at the 20 per cent rise in the chief executive's salary and large interest payments on deferred bonuses. The bank's chairman, Marcus Agius, said he understood shareholders' unhappiness about Barclays' depleted dividend, but that the bank had cut the payout during the crisis because it needed to raise new capital. Mr Agius and Mr Diamond tried to head off criticism by pledging to improve poor customer service and admitting that shareholder returns were unacceptable. Mr Diamond also denied talking to US regulators about moving the bank to New York, and said he wanted to continue Barclays' 320-year history in the UK. Mr Diamond is cutting costs and getting out of unprofitable businesses. As well as quitting Indonesian and Russian retail banking, the bank will also consider selling its Spanish business

Barclays Bank shareholders dished out a strong protest against pay plans for Bob Diamond

Barclays Bank shareholders dished out a strong protest against pay plans for Bob Diamond and other top executives at the bank's annual m...

prestigious British university is to review the work of one of its academic research centres because its funding was arranged by the Syrian regime of Bashar al-Assad, the Guardian can reveal.

<a href="http://www.guardian.co.uk/education/2011/apr/27/syrian-funding-st-andrews-university"> </a>The University of St Andrews, where Prince William and Kate Middleton studied, has received more than £100,000 in funding for its centre for Syrian studies with the assistance of Syria's ambassador to the UK, Sami Khiyami. Following questions from the Guardian about its relations with figures associated with the regime – and "in view of significant international concerns about recent events in Syria" – a spokesman for St Andrews said the university would be reviewing the centre's work "to ensure its high academic standards are maintained". The university's association with the Assad regime has come under scrutiny in the wake of the violent crackdown on pro-democracy demonstrators in Syria which is estimated to have claimed 450 lives so far. In addition to Khiyami, who the Foreign Office confirmed last night had been invited to the royal wedding, the centre's board of advisers also boasts figures closely associated with the Damascus regime, including Fawaz Akhras, the charismatic British-based cardiologist who is not only Bashar al-Assad's father-in-law, but also acts as a gatekeeper for the family, screening British journalists before they are granted an interview with his daughter Asma al-Assad or his son-in-law. Akhras is also the founder of the British Syrian Society, which has organised visits to Damascus and meetings with Bashar al-Assad for sympathetic members of parliament, as well as organising an investment conference in London to introduce British, European and Arab businesses to Syrian government ministers. Opened in November 2006 as part of the university's school of international relations, funding for the centre was only secured with the assistance of Khiyami, who, according to the centre's head, Prof Raymond Hinnebusch, persuaded Syrian-born British businessman Ayman Asfari to pay for it. Asfari is head of Petrofac, the London and Aberdeen-based oil and gas services company, which is a partner of the Syrian government in two major projects in the country worth $1bn, according to the company's figures. The latest embarrassing disclosure over connections between a British university and an authoritarian Arab regime follows the row that engulfed the London School of Economics over its links with Muammar Gaddafi's regime. Supporters of the centre and of Hinnebusch – including the author Patrick Seale, who is an adviser to the centre – insist on the necessity of engaging with Syria as it appeared to be grappling with reform, and stress the seriousness of its academic work. But critics claim that British universities should have been far more vigilant before associating with regimes with a record of human rights and other abuses. According to Hinnebusch, writing in the Syrian Studies Association newsletter last year: "Khiyami made the decisive breakthrough in finding a philanthropist who was willing to provide the funding to launch the centre." A well-known scholar on Syria, he insists that his centre supports "politically unbiased research", and he has written that he believes Syria is "lamentably misunderstood in policy circles and in the western media where the over-amplified voices of special interest pundits are allowed to demonise all who oppose imperial plans for the region". Despite the fact that the opening of the centre came at a time when western governments were attempting to engage with Damascus, Syria remained – as it still does – a police state with few political freedoms or rights of free expression, and a state where human rights abuses continue. Among events organised by the centre, in partnership with the Orient Centre for International Studies based in Syria, was a conference in Damascus in 2008 with papers provided by a former adviser to Hafez al-Assad, Bashar's harshly authoritarian father who was implicated in numerous human rights abuses, and other pro-regime officials. Robert Halfon, the Conservative MP for Harlow, who has called for an inquiry into universities' links with despotic Middle Eastern regimes, said: "We need to learn from what's happened with Libyan funding of our universities, that universities should not accept money from governments like Syria, or those with connections to the Syrian government. The danger is that you get compromised by the amount of money, and it inevitably influences your outlook on the Middle East. I've argued that universities that take money from dictatorships should receive a reduction in their public subsidy." The MP said he found it astonishing that St Andrews had not mentioned the relationship with Syria in response to a freedom of information request he submitted about donations from the Middle East or Africa since 2000. Robin Simcox, who studied foreign funding of universities in a report for the Centre for Social Cohesion, said: "Universities take this money claiming they're going to break down walls and open relations. What they end up doing is colluding with murderous family-run regimes. These universities have got it wrong. With the likes of Gaddafi, they say the people they're taking money from are reformers. They're notreformers, they're tyrants." Sam Westrop, a spokesman for a student-run campaign to ensure ethical funding of universities, said that it would put pressure on St Andrews to explain its Syrian links.

prestigious British university is to review the work of one of its academic research centres because its funding was arranged by the Syrian regime of Bashar al-Assad, the Guardian can reveal.

The University of St Andrews, where Prince William and Kate Middleton studied, has received more than £100,000 in funding for its centre for...

FORMER bank chief Sir Fred “The Shred” Goodwin faced mounting pressure yesterday to come clean over his privacy injunction.

Politicians demanded to know whether the “private matter” the ex-RBS boss is guarding with a gagging order had any bearing on the bank’s disastrous collapse. Sir Fred, 52, dubbed “The Shred” for his ruthless culling of staff, ran the Royal Bank of Scotland into the ground. Advertisement >> The bank was bailed out by the taxpayer to the tune of £45billion, while Sir Fred picked up a £340,000-a-year pension and a £2.7million lump sum. Lib Dem MP John Hemming said: “We need to know whether the issue behind the injunction had any impact on Sir Fred’s judgment. Did he take his eye off the ball while running RBS? Has a lot of public money been spent on something that was affected by this issue?” Mr Hemming has given a copy of the court order to the Treasury select committee to see if its contents are relevant. He added: “This adds to the pressure on Sir Fred to come clean.” Mr Hemming, who has a meeting with the Speaker of the House of Commons on the issue today, used parliamentary privilege in March to name the ex-banker as the man who went to court to stop the media referring to his former role. The move led to questions about the nature of the court order. Lib Dem Lord Oakeshott also used parliamentary privilege to ask about Sir Fred’s injunction in the House of Lords this week and yesterday Tory MP Louise Bagshawe called for him to confess its contents. She said: “There is a public interest in Sir Fred Goodwin because of the huge pension he was given and the honour he was given. It would be a good idea if he followed Andrew Marr’s example.” TV host Marr revealed earlier this week that he had been granted a super-injunction to conceal an extra-marital affair.

FORMER bank chief Sir Fred “The Shred” Goodwin faced mounting pressure yesterday to come clean over his privacy injunction.

Politicians demanded to know whether the “private matter” the ex-RBS boss is guarding with a gagging order had any bearing on the bank’s dis...

RBS CEO’s “obscene” bonus gets approved

The Chief Executive Officer of RBS, Stephen Hester, has had his £7.7 million bonus approved by UK Financial Investments (UKFI), which manage...

EU budget rise demand totally unacceptable

A demand for a 4.9% increase in the European Union's annual budget is "completely unacceptable", a UK government source has said. Ministers would "work with international partners to fight for the best possible deal for the British taxpayer", they told the BBC. The EU's executive arm, the European Commission, says the rise is needed to fund existing spending commitments. But the government has called for the budget to be capped in future. The above-inflation 4.9% increase would take the commission's total funding for 2012 to 132.7bn euros (£117bn). The Downing Street source pointed out that the budget was within the framework which runs up to 2013, which was agreed to by the previous Labour administration in 2005 and meant the UK did not have a veto. He added that, last year, the EU Commission had proposed a 6% increase, but that the UK and other EU partners had reduced this to 2.9%. The UK, France and Germany have also proposed that the EU budget be frozen until 2020, with any increases linked to inflation.

EU budget rise demand totally unacceptable

A demand for a 4.9% increase in the European Union's annual budget is "completely unacceptable", a UK government source has sa...

UK banks lose Payment Protection Insurance challenge

UK banks have lost a judicial review that could have a major impact on whether more compensation has to be paid on mis-sold loan insurance. Banks will now have to look back at past sales of Payment Protection Insurance (PPI), even if consumers have not complained. Some estimates have said this could lead to a £4.5bn bill for the banks. The British Bankers' Association (BBA), which said it was "disappointed" by the ruling, has 21 days to appeal. The BBA also said banks would continue to put some fresh cases on hold until it had decided whether to continue its challenge in the courts. Judgement 'clear-cut' Thousands of people have already received compensation because they were mis-sold PPI policies, which are supposed to repay people's loans if their income drops because they fall ill or lose their jobs. The banks challenged the Financial Services Authority (FSA) over guidelines it published last year which said banks should contact all past PPI customers and invite them to complain if they thought they had been mis-sold PPI. Continue reading the main story How to claim Not everyone was mis-sold payment protection insurance - it was appropriate for some people For those who think they were mis-sold PPI, they should complain to the bank or loan provider that sold it If, after eight weeks, there is no response, or there is a response that the recipient is unhappy with, then a complaint can be made to the independent Financial Ombudsman Service But High Court judge, Mr Justice Ouseley, rejected the challenge. Natalie Ceeney, the chief financial ombudsman, said: "This judgment is very clear-cut - and it confirms that the ombudsman's approach to PPI complaints is right. "People have been waiting a long time while the banks' legal action has been ongoing. I would now like to see financial businesses showing real commitment to sorting out their customers' complaints efficiently and promptly." Pay-outs Some PPI sales proved appropriate but the banking industry has been accused of mis-selling them on a huge scale, generating many millions of pounds in profits by selling insurance that people were unaware they were paying for or did not need, or on which they could not claim. Some of these people have been compensated, sometimes after their case was initially rejected by the banks. During the judicial review hearings in January, the court was told that implementation of the new guidelines could cost the banks and credit card companies as much as £4.5bn, paid to millions of people. Customers would have to be repaid their PPI premiums, plus interest, if the bank or other firm concluded that the customer would not have bought the policy in the first place if they had been fully aware of the policy's details. The High Court judgement will affect millions of bank customers A similar reimbursement could be due to those customers that paid for a policy in full up-front. There have been more than 200,000 cases referred to the Financial Ombudsman Service about PPI in recent years, including 100,000 in the past financial year and now 5,000 each week. About three in four complaints have been upheld in the past. The Financial Ombudsman Service said there should no longer be any stalling over fresh cases. Complainants included people such as Gary Thomas, from London. "I was sold a PPI policy - it amounts to 25% of the cost of the loan covering me for a five year period. In total it cost me £20,000 over a five-year period on a £60,000 loan," he said. "I feel I was misled by this company and asked the ombudsman to look into it. It is nothing short of theft. They should be stopped from selling the insurance." Banks 'disappointed' The UK's banks, represented by the BBA, challenged the FSA's new requirements. They argued that the FSA was effectively applying new rules to previous sales - even when those sales were regulated by other FSA rules. "It was due to the widespread concerns that the FSA and the Financial Ombudsman Service had not properly applied the law in this area - and only having exhausted all other avenues for resolving the underlying dispute that a judicial review was sought," the BBA said. "We are disappointed with today's judgment and now need to consider the details of it very carefully as well as next steps, including whether it would be appropriate to apply for permission to appeal." But the FSA, which said there had been 1.5 million complaints about PPI since 2005, said: "Our primary aim has always been to get proper redress, once and for all, for those with genuine complaints. "We believe this decision signals the end of years of poor complaint handling and will trigger a dramatic improvement in the way customers are treated when complaining."

UK banks lose Payment Protection Insurance challenge

UK banks have lost a judicial review that could have a major impact on whether more compensation has to be paid on mis-sold loan insurance. ...

Finnish nationalists challenge EU bailouts in election that has Europe on edge

When Finns elect a new Parliament on Sunday, they'll also effectively be voting on bailouts to Portugal and other cash-strapped European economies. A nationalist opposition party, the True Finns, is expected to make strong gains in the ballot, riding popular support for a platform of immigration cuts and opposition to lifelines for the eurozone's debt-ridden members. The True Finns say Finnish taxpayers are being unjustly burdened by "squanderers" in the 17-nation eurozone, noting that no one rushed to the Nordic country's aid during its own financial crisis in the 1990s. Finland is now among the most fiscally prudent in the group. Finland's voice matters for Europe: any bailout requires the unanimous support of all eurozone members. And unlike other countries, where the government decides whether to approve rescue funds, it's Parliament that makes the call in Finland. Even if the True Finns don't make it into the government after Sunday's vote — polls show them with 15-20 per cent support — Finland's participation in future bailouts could be in doubt. The leader of the main opposition Social Democrats has hinted they, too, might oppose more bailouts, demanding that banks and creditors also bear responsibility. "Europe is worried. There hasn't been such interest before in elections in Finland," said Olavi Borg, professor emeritus in political sciences. True Finns' leader Timo Soini says he will vote against new bailouts whether his party is in the next coalition government or not. "We are against any new contributions to bailouts. This is not the way to do it," Soini told The Associated Press. "Banks have to be made responsible for lending money too freely and countries in trouble should sell their assets." The EU's unanimity rules on approving bailouts or changing their conditions mean if one country steps out of line the system would crash, severely undermining the credibility of the eurozone that has worked hard to present a united front during the divisive debt crisis. It could also exacerbate it at a precarious moment when decisions are expected on whether bailouts will end with Portugal or will also be needed for larger economies like Spain or Italy. Finland currently is responsible for some €8 billion ($11.5 billion) in guarantees of a total €440 billion ($634 billion) agreed by the eurozone for its main bailout fund, but those are likely to go up significantly as the currency union completes a promised boost of the fund's lending capacity. Finland says it cannot agree to any new commitments until a new Parliament, and government, are in place. "I don't think Finnish taxpayers should cough up any money for Portugal. Bailouts are just wasted money — like throwing cash into a bottomless pit," said Henri Nylund, a 23-year-old jobseeker. "Countries that overspend should not be helped but punished for their stupidity." Some 60 per cent of 2,400 respondents in an April 8 survey by Think If Laboratories said they opposed bailouts, while 31 per cent approved. The margin of error was 3 percentage points. Prime Minister Mari Kiviniemi's centre-right government has maintained bailouts are necessary to avoid eurozone turmoil that would have a devastating impact on Finland, a small economy dependent on exports that is only now recovering from the global economic downturn. Polls show Kiviniemi's Center Party and its main ally, the conservative National Coalition Party, can stay in power with the help of smaller partners. But it's likely to be a tight race. And if the True Finns score higher than Center or the National Coalition they cannot be ignored in coalition talks. The True Finns only won 4 per cent of votes in the last election, in 2007, but polls show their level of support has more than tripled and is approaching that of the three biggest parties — Center, National Coalition and the Social Democrats, which each have about 20 per cent. Soini's party has managed to garner support among the unemployed and politically unmotivated in a country where voter turnout has steadily declined to an all-time low of 65 per cent in 2007. While the government says savings are badly needed to further help Finland lift itself in the recession aftermath, the True Finns advocate more defence spending and help for the sick and elderly. In a TV commercial, True Finns' candidate Jussi Halla-Aho rejects proposals to cut welfare and defence spending, saying into the camera: "I would first cut immigration." The nation of 5.3 million has one of the smallest foreign populations in Europe, at 3 per cent. But the nationalists say it is too easy for immigrants to arrive and apply for social welfare. The largest group of foreigners, some 55,000, are Russian speakers mainly from former Soviet countries. Finland also has a small Somali community. Nasima Razmyar, a 26-year-old candidate for the Social Democrats who immigrated from Afghanistan with her parents when she was 5, said she thought the True Finns lacked a clear idea on how to govern. "I think they have a really loud voice, but real acts and real policies, there's not so much," she said.

Finnish nationalists challenge EU bailouts in election that has Europe on edge

When Finns elect a new Parliament on Sunday, they'll also effectively be voting on bailouts to Portugal and other cash-strapped European...

Two Deutsche Bank traders arrested in Hong Kong

Deutsche Bank AG (DBKGn.DE) said two of its traders were arrested in a Hong Kong bribery probe, yet more bad news for the bank which has come under increased scrutiny from regulators across the globe. The case marks the bank's third major brush with regulators in the Asia region, where Deutsche wants to almost double revenues to around 4 billion euros ($5.78 billion) this year compared with 2008 levels. [ID:nWEA5547] [ID:nWEA5552] "Deutsche Bank was advised by the Independent Commission Against Corruption of the arrest of two employees, both warrants traders in Hong Kong. The two traders were immediately placed on leave from the bank until the matter is resolved," a bank spokesman said on Friday. The bank said it was not under investigation itself and that it was fully assisting with the probe. On Thursday Hong Kong's commission against corruption (ICAC) said it had arrested 11 people "for alleged bribery in relation to fraudulent trading of derivative warrants issued by a bank". The ICAC did not identify any of the people detained or the bank involved. Deutsche Bank shares were trading 0.9 percent lower at 1143 GMT on Friday, underperforming the German blue-chip DAX index which was up 0.4 percent.Two Deutsche Bank traders arrested in Hong Kong

Two Deutsche Bank traders arrested in Hong Kong

Deutsche Bank AG (DBKGn.DE) said two of its traders were arrested in a Hong Kong bribery probe, yet more bad news for the bank which has com...

latest round of stress tests revealed that Irish banks continue to bleed money

latest round of stress tests revealed that Irish banks continue to bleed money. Fresh losses and write-downs at the country's biggest banks led the central bank to call last week for €24 billion in capital injections. This could bring the total cost to Irish taxpayers of propping up the banks to €70 billion, or more than half of its GDP. As for the owners of Irish bank debt, their losses still amount to . . . zero. Irish lawmakers promised this would be their fifth and final attempt to find the bottom of their country's banking crisis. Count us among the unconvinced. As the banks' losses deepen and Dublin's credibility withers, now is an apt time to rethink the foundations of the European Union's Irish-rescue strategy, one that is now effectively premised on sinking one country so that tough political choices may be avoided in another. Irish leaders face today the same basic choice that they have since the crisis began: accept massive bailout borrowing to keep their banks' creditors whole, or share the burden by demanding that those bondholders give up a portion of their returns on Irish debt. The new Fine Gael government won office this year by promising the latter, but that prospect was nowhere to be found in last week's announcements. To date the EU has insisted that haircuts for bondholders would have a dangerous ripple effect because of the extent to which Irish debt is held by banks elsewhere in Europe. That exposure is indeed huge: The latest figures from the Bank for International Settlements show that euro-zone banks had $285.7 billion in claims on Ireland as of September 2010. Burning these creditors would inevitably cause pain, not least in France and Germany, whose banks hold the bulk of the euro-zone exposure to Ireland according to the BIS. But pain in German banks ought to be Germany's responsibility to mollify, not Ireland's. If losses on Irish debt would cause German banks to require recapitalization, then German taxpayers should pony up to fill the gap, and likewise across the euro-zone core countries. The threat of "contagion," that favorite bugbear of officials at the EU and the International Monetary Fund, is a reason to spread cleanup responsibility around, not to plug it up at the edges. No such luck for Irish taxpayers, even if the Emerald Isle isn't exactly blameless here, either. A decade of bad lending by Irish banks laid extensive kindling for the eventual fire. Dublin fumbled too, when it extended a state guarantee to bank creditors and turned a bank solvency problem into a national solvency problem. But what is now being sold as Ireland's contribution to systemic stability is in fact a dodge, a way for German and French leaders to avoid owning up to their own banks' bad decisions in lending to Irish institutions in the first place. Is it still possible to change course? In many circles, some form of debt restructuring is beginning to look inevitable. Der Spiegel reported this week that the IMF is now "privately pushing" Greece in that direction. Explaining its downgrade of Irish debt last Friday, Standard and Poor's said that restructuring may be a prerequisite for periphery governments if they eventually wish to borrow from the European Stability Mechanism, which replaces the current loan facility in 2013. Our hope is that it won't take two years for European officials to do what markets already think needs to be done. Bond yields will remain high as long as investors are expecting to take haircuts, making all of that bailout lending even harder to pay back. But the experience so far has made clear who rules Ireland and the rest of the euro-zone periphery today, and who in fact benefits most from a rescue plan that is meant to work toward the stability of all of Europe.

latest round of stress tests revealed that Irish banks continue to bleed money

latest round of stress tests revealed that Irish banks continue to bleed money. Fresh losses and write-downs at the country's biggest b...

FORMER Anglo Irish Bank boss David Drumm allegedly paid himself a monthly salary of €6,000 -- despite filing for bankruptcy.

<blockquote> He also lent his brother thousands of dollars and splashed out on two luxury cars at a time when he claimed he was struggling for cash last year. Details of his lavish spending habits have emerged during a bankruptcy hearing in Boston. He moved to the US after quitting Anglo just before the bank was nationalised in January 2009 and has refused to return to Ireland to face garda questioning over his role in its downfall. Anglo is now pursuing him for €8.5m that it says he owes them. The court heard how how paid himself a salary of €6,325 a month from his financial advisory business, even though he only had two customers. Despite his bankruptcy application, he also made a €4,200 loan to his brother. In further major spends, he splashed out more than €48,000 on a Range Rover in 2009 as well as staying in some of the most expensive hotels in New York during a business trip there. And when he sold his SUV the following year, for €34,500, he upgraded it for a newer model, costing €50,600. Details of his spending habits emerged during questioning by lawyers for Anglo, which is opposing his discharge as a bankrupt. Brother Asked why he sold his 2009 Range Rover, he replied: "It wasn't a good car." When it came to the issue of giving his brother a loan, in the wake of his bankruptcy application, he said how his sibling had "needed the money". The hearing also heard how he began transferring assets to his wife, Lorraine Drumm, in September 2008 at the height of the world financial crisis. She had not held her own bank account prior to this. Attorney Kenneth Leonetti spent much of the hearing demonstrating that the money the former banker claimed to have borrowed from his wife was derived from salary and bonuses from Anglo. These totalled €13m between 2004 and 2009. The hearing continues.</blockquote>

FORMER Anglo Irish Bank boss David Drumm allegedly paid himself a monthly salary of €6,000 -- despite filing for bankruptcy.

He also lent his brother thousands of dollars and splashed out on two luxury cars at a time when he claimed he was struggling for cash last ...

Global accounting firm KPMG has been implicated in fraud charges against a sports company owned by Tom Hicks for keeping mum on the company’s gloomy financial position before going bust in 2009.

Global accounting firm KPMG has been implicated in fraud charges against a sports company owned by Tom Hicks for keeping mum on the company’s gloomy financial position before going bust in 2009. New York-based GSP Finance said in a lawsuit filed in US court that the accounting firm abetted the Hicks Sports Group’s (HSG) failure to disclose to creditors its ailing finances. “KPMG’s fraud inflicted significant losses on GPS and the lenders. Had KPMG exercised professional due care, its March 31, 2008 independent auditor’s report would have disclosed both Hicks Sports’ inability to continue as a going concern and its breach of the Debt Covenant,” the suit said. Hicks owns the American sports group, which holds the Dallas Stars hockey team and Texas Rangers baseball team. The sports company defaulted on a $540 million credit in 2009. HSG suffered major losses shortly before Hicks acquired the Liverpool FC in 2007. According to GSP, the sports company lost $113 million in 2002, $67.8 million the year after, and $95 million in 2004. GSP said it could have recovered the $67 million borrowed by HSG if only the accounting firm did raise concerns about HSG’s inadequate cash to sustain interest payments and debts.

Global accounting firm KPMG has been implicated in fraud charges against a sports company owned by Tom Hicks for keeping mum on the company’s gloomy financial position before going bust in 2009.

Global accounting firm KPMG has been implicated in fraud charges against a sports company owned by Tom Hicks for keeping mum on the company’...

wife of a former Hanford manager was sentenced to a year and a day in prison

wife of a former Hanford manager was sentenced to a year and a day in prison Thursday for defrauding the Department of Energy of $487,000. Judge Robert Whaley of Eastern Washington Federal District Court gave Anita Gust less than the prosecution requested after her husband, Paul Kempf, yelled and stormed out during the sentencing hearing. She also will be required to repay the $487,000 she admitted to stealing and that Kempf is accused of taking from the government through fraud. Kempf is scheduled to go to trial May 16. Kempf previously worked as the operations manager for the Hanford nuclear reservation 222-S Laboratory for former contractors Fluor Hanford and CH2M Hill Hanford Group. Gust operated a company called AMG Marketing out of their West Richland home. AMG was an authorized vendor of laboratory supplies for the 222-S Laboratory from late 2000 to late 2005. Kempf is accused of making about 155 federal credit card purchases with Gust during those years, under the guise of lab supply purchases. But AMG created fraudulent invoices for those purchases and did not deliver supplies to Hanford, according to the indictment for Gust and Kempf. Federal prosecutors accuse Gust and Kempf of converting $487,000 in charges paid by the federal government to their personal use, including $105,000 in personal checks made out to Gust. They also spent $50,000 to renovate a 1966 Chevy Nova, $63,000 on auto and boat expenses, and $17,000 on home improvements, according to court sentencing documents for Gust. Kempf did the ordering and processing of the credit cards, called purchase cards at Hanford, said Gust's attorney, Shelly Ajax. Gust had no business background, little computer savvy and some reading issues, Ajax said. She did not know how to process a purchase card transaction and did not open the business mail, Ajax said. "I knew my husband was doing this," said Gust, who was crying so much the judge told her he could not hear what she was saying at one point. But her husband was very controlling and she avoided confronting him to keep the peace, she said. "Living in my house was walking on eggshells," she said. She should have left him and raised her youngest child alone, she said. She was telling the judge that she should have contacted authorities to put an end to the fraud when Kempf yelled from the gallery, "We were in this together!" Then he stormed out of the courtroom. The defense had asked for home confinement rather than a prison sentence, but the government believed that prison time was warranted, said assistant U.S. attorney Jill Bolton. Gust created the company and was responsible for the banking, Bolton said.

wife of a former Hanford manager was sentenced to a year and a day in prison

wife of a former Hanford manager was sentenced to a year and a day in prison Thursday for defrauding the Department of Energy of $487,000. J...

Britain has taken a step towards shaking off its global reputation for being soft on corruption

Britain has taken a step towards shaking off its global reputation for being soft on corruption with the release of long-awaited guidelines on bribery and graft. The Ministry of Justice's (MoJ) Bribery Act is designed to speak with a single clear voice, drawing disparate strands of law together in one bill that will dictate if a company is breaking the law. But how distinct is the message? How determined is Britain to clamp down on bribery, whether by UK firms or by foreign corporates with listings in London? And what should you do if a partner of your company operating in a murky foreign land acts unethically? First, let's look at what is right about the legislation. The new act is clear and lucid in many ways and a huge step up from previous measures, which were seen as weaker than similar bills in America and Germany and prone to manipulation. It deals with the tricky issue of corporate hospitality with 'great common sense,' according to Matthew Kelly, an expert in white-collar crime at US law firm Skadden Arps. Thus a small dinner to discuss a trade deal will be deemed a natural step in the process of doing business by the Serious Fraud Office (SFO), which investigates cases of complex fraud. But if your company wins a lucrative deal to build aeroplanes for the Chinese or power plants in Nigeria after taking a large party of company officials heli-skiing in Alaska, expect a knock on the door. The same goes for the process of so-called facilitation payments (often called 'speed' or 'grease' payments) routinely paid to public officials to smooth the process of routine and necessary transactions. These remain illegal, as they were in previous bills. But the SFO is set to pursue charges of facilitation payment in a pragmatic and unobstructive manner that takes into account, one London lawyer notes, the 'difficulty of doing business in many foreign countries'. Critics of the new measures - and there are many - have pounced on the fuzzier areas. Interpretation is the act's biggest failing. If a British-based company is accused of offering illegal inducements, it is deemed fair game by both the MoJ and the SFO. But both public institutions appear to differ in whether to pursue corporations that may have a London listing but little tangible UK presence.

Britain has taken a step towards shaking off its global reputation for being soft on corruption

Britain has taken a step towards shaking off its global reputation for being soft on corruption with the release of long-awaited guidelines ...

Online dealer Webuyanycar.com has been rapped by the consumer watchdog over concerns that it misled customers by valuing their vehicles at a higher price than it eventually paid.

Online dealer Webuyanycar.com has been rapped by the consumer watchdog over concerns that it misled customers by valuing their vehicles at a higher price than it eventually paid. The Office of Fair Trading (OFT) has taken enforcement action against the group after finding nearly 96% of people who sold their car through the website received less for their vehicle than the initial valuation suggested, with some prices being knocked down by hundreds of pounds. Customers were given the impression that they would be paid the online valuation price as long as their car matched the condition they had claimed, but other factors - including market conditions - were found to lead to a reduction in the money they received. The OFT also found that the Rochdale-based firm's vehicle inspectors were sometimes given targets to reduce the valuation by as much as 25%. The OFT was concerned that once customers had driven their car to the company's premises, they might accept a reduced valuation even if they were unhappy with it because of the time and expense they had already incurred or because they needed a quick sale due to personal circumstances. The car dealer gave sellers the impression that the online valuation they received was only valid for seven days, which encouraged people to make an appointment quickly, it added. The OFT findings come after it analysed data provided by the company for the year to June 30 2010. Webuyanycar.com, which claims to be the UK's largest buyer of second-hand cars and is known for its TV adverts, said it had made changes over the past year to improve its customer service. It has signed a series of undertakings with the OFT to improve the way it treats customers. Cavendish Elithorn, senior director of the OFT's consumer group, said: "Selling personal possessions through the internet is increasingly popular, especially in these tough economic times. But it's important that the headline figure isn't chipped away at by the buyer, because it makes it very difficult for consumers to shop around and find the best deal." Richard Harrison, chief operating officer of Webuyanycar.com, said the OFT findings did not reflect current practice. He added: "In the early days, we were operating a new business and defining a new market sector and we didn't get it right for every single customer. This was a long time ago and isn't reflective of the business we are today."

Online dealer Webuyanycar.com has been rapped by the consumer watchdog over concerns that it misled customers by valuing their vehicles at a higher price than it eventually paid.

Online dealer Webuyanycar.com has been rapped by the consumer watchdog over concerns that it misled customers by valuing their vehicles at a...

Top