Friday, 28 September 2012

'LIBOR Banksters' - The 'UK Financial Services Authority' strolls into (in)action

An apparently hard-hitting report, highlighting the many failings of the 'London Inter-Bank Offered Rate' ('LIBOR'), has now been made public. 

Martin Wheatley

The report's author, Martin Wheatley (the new Managing Director of the Consumer and Markets Business Unit of the Financial Services Authority in the UK) has made the following 'recommendations:'

The introduction of a new regulatory structure for LIBOR, to include criminal sanctions for those who attempt to manipulate it.

The removal of the LIBOR governance role from the British Bankers' Association (BBA).

The inviting of other groups to apply to take over the LIBOR governance role, and to conduct regular audits and propose a new code of conduct.

The encouragement of more banks to submit LIBOR rates to make it more representative.

A modification in some of the technical data upon which LIBOR has previously been fixed.

The holding back from public disclosure of some of LIBOR data for three months, to prevent manipulation.

At this point, readers of this Blog are reminded that Mr. Wheatley is talking about (what is almost universally-accepted to be) a fundamentally- corrupt system for making mountains of money that a bunch of previously- deaf, dumb and blind, UK financial regulators, and their political masters, have allowed to exist unchallenged for many years, in which a mysterious, variable figure, LIBOR (based on unverified and, therefore, potentially-false, 'estimated data' supplied by, a few previously-unaccountable junior bankers who had been offered substantial financial inducements, 'bonuses,' by a few previously-unaccountable senior bankers, to lie), has been decided each day in London by a few more previously- unaccountable senior bankers, and then used to rig the price of a whole range of ongoing financial transactions around the world. 

These international, LIBOR-polluted transactions total an estimated $US 800 000 000 000 000 dollars (i.e. eight hundred trillions United States dollars) and the LIBOR-rate is known to have been deliberately falsified on literally hundreds of separate occasions. No matter what they have recently steadfastly pretended to be reality, there is absolutely no way that the bosses of the various banks concerned could have been unaware that these monumental criminal acts were being committed by their subordinates.

As ever, I am not at all surprised by the apparent incapacity of senior UK regulators, and their political masters, to grasp how major organized crime functions, because, legalistically, at the present time, no such crime as racketeering exists in Britain. 

That said, Mr. Wheatley worked for the London Stock Exchange for 18 years, 6 of which were spent on its board where he achieved the post of Deputy Chief Executive. During this period, he was closely involved with the controversial, failed merger of the London Stock Exchange and its German equivalent, Deutsche Borse.  Mr. Wheatley also sat on the Listing Authority Advisory Committee of the UK Financial Services Authority. However, he was made redundant in February 2004.
Mr. Wheatley then joined the Hong Kong Securities and Futures Commission as its Executive Director for Market Supervision. 
In 2006, Mr. Wheatley became Chief Executive Officer of the HKSFC, where he was noted for directing a rigorous campaign (including successful criminal prosecutions) against insider traders.  However, following the collapse of Lehmann Bros., the HKSFC accepted more than HK$6.5bn (US$835m) in investor compensation from 20 banks and brokers who were seeking to settle criminal allegations of mis-selling Lehman-related products. 
Mr. Wheatley announced his resignation from the HKSFC at the end of 2010. His total final payment in that capacity for 2010, was HK$9.09 millions (approximately US$1.2 millions). 
Almost immediately, the UK Financial Services Authority triumphantly announced the appointment of Mr. Wheatley as its new Managing Director of the Consumer and Markets Business Unit (effective from September 2011). On the same day, Her Majesty'sTreasury (the UK finance ministry) announced that Mr. Wheatly would become the CEO designate of the proposed Consumer Protection and Markets Authority (CPMA), one of the two new regulatory bodies to be created from the division of the existing FSA. The CPMA, now known as the Financial Conduct Authority (FCA), is due to be established by the end of 2012. About 3,000 staff from the existing FSA, including virtually all the support functions, will go to the FCA.  Its stated mission is: to 'supervise markets, smaller brokers and advisers and watch how financial institutions of all sizes treat their customers.' 
Mr. Wheatley is also a member of the Financial Stability Board Standing Committee on Standards Implementation, as well as the International Organization of Securities Commissions (IOSCO) Technical Committee. 
Mr. Wheatley has chaired the IOSCO Technical Committee Task Force on Short Selling.

Meanwhile, various commentators continue to ask:

 What has been the point of having an agency of UK government known as the 'Serious Fraud Office?'

Three months ago, in a brief statement from the UK Serious Fraud Office, the current Director, David Green CB QC, said that he had decided formally to accept the LIBOR case for criminal investigation. The SFO was going to form a 'case team' of lawyers from its permanent staff of around 300, to pursue the investigation. Although it was admitted that this could take several years, an SFO spokesman observed that the remit of the investigation would not be confined to Barclays Bank. Indeed, he said: 

'We don't mention Barclays in our statement, just LIBOR.'

Who shall guard the guards?

The spokesman also failed to mention that SFO lawyers/investigators often have a severe conflict of interest; for no common-sense rule exists which prevents them from leaving law enforcement to take much-more highly-paid jobs in the private sector.  

It was also unofficially disclosed that the SFO abandoned its previously-secret plans to investigate the 'LIBOR rate-fixing' scandal in September 2011, mainly for 'budgetary reasons.' Whilst a previous Director of the SFO was recently reprimanded by senior UK High Court Judges for bowing to external pressure and unlawfully taking it upon himself to drop a high-profile fraud, and corruption, case (concerning criminal activities dating back to the 1980s) resulting in the waste of huge amounts of tax-payers' cash.

Sadly, the wider track record of the UK SFO has been even more farcical .

This link will take Blog readers to the external website of the UK Serious Fraud Office 
The Home page (which, like everything at the SFO, has been paid for with UK tax-payers' money) contains the following 'mission statement' (replete with split infinitives):
'Our aim is to protect society from extensive, deliberate criminal deception which could threaten public confidence in the financial system. We investigate fraud and corruption that requires our investigative expertise and special powers to obtain and assess evidence to successfully prosecute fraudsters, freeze assets and compensate victims.'
Now this comic-book narrative of honest SFO heroes locked in a never-ending struggle with dishonest villains (although particularly badly-written), can appear (at first glance) to be perfectly laudable, until you begin to compare it to the adult world of quantifiable reality (i.e. the actual performance figures of the SFO). That said, it is interesting to note that senior SFO officials don't actually claim to be protecting society, only aiming to protect society. Unfortunately, they don't appear to be very good shots.

The SFO's own annual reports reveal that an expensive rampart, apparently built to enforce the criminal law and hold back an invasion of fraud and corruption, has been the legalistic equivalent of the Maginot Line. For a vast, mobile and much-better- financed army of racketeers (escorted by mercenary lawyers), has simply danced round the sedentary line of dunces with law diplomas entrenched at the SFO, as though it wasn't there. In the case of the ongoing, multi-billion dollar 'MLM/Amway income opportunity' fraud, the invaders actually hired former, SFO Deputy Director, Peter Kiernan, to guide them, and I have no doubt that banksters have already recruited similar law enforcement traitors from the amoral ranks of the legal profession.
During the period 2011-2012, the SFO cost British tax-payers about £37 millions whilst the organization added 35 millions pages to its collection of 112 millions electronic documents. During the same period, although agents of the SFO apparently received more than 500 tip-offs, it only prosecuted 20 cases and managed to recover around £50 millions of assets stolen by means of fraud. Of this pathetic figure, virtually nothing went back to the victims.
In reality, although around £2 billions of fraud was reported to UK law enforcement agencies in 2011, no one can evaluate for certain the true level of fraud going unreported. Indeed until 2006, no agency of government even bothered to try. Currently, the best available estimates (from the UK Fraud Authority) are that, during the past several years, at least £50 billions ( that's fifty thousand millions pounds) has been stolen annually from the British economy by means of fraud. However, this still- rapidly-expanding figure has not yet included the titanic 'LIBOR rate-fixing,' or 'MLM income opportunity,' frauds. Thus, when presented as a percentage of the overall damage being caused by fraud in Britain, the UK SFO's quantifiable contribution to law enforcement (i.e. its approximately 0.001% annual recovery rate), has been so insignificant that it is not even worth the mental effort to calculate. 

The SFO's own annual reports have, in fact, been nothing more than an open-invitation to criminals; for these glossy brochures clearly advertise the alarming fact that if you commit a serious fraud in Britain, the chances of being held fully to account, have been effectively-zero.

'Our aim is to protect society from extensive, deliberate criminal deception which could threaten public confidence in the financial system. We investigate fraud and corruption that requires our investigative expertise and special powers to obtain and assess evidence to successfully prosecute fraudsters, freeze assets and compensate victims.'

Even the briefest examination of the quantifiable evidence, reveals that the 'UK Serious Fraud Office,' has been an abject failure, whilst the organization's impressive-sounding 'mission statement,' could have come straight out of George Orwell's 'Nineteen Eighty-Four.'

Danny Alexander MP

In the light of all these facts, what exactly did he mean, when Chief Secretary to the UK Treasury, Danny Alexander MP (b. 1972), said (apparently, fully-awake, sober and in all seriousness) that he was delighted to hear that the SFO will be launching an investigation of the 'LIBOR rate-fixing' scandal?

David Brear (copyright 2012)

No comments:

Post a Comment