Thursday 23 February 2017

Asset Based Lending Fraud

Asset Based Lending fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution.[1] In many instances, bank fraud is a criminal offence. While the specific elements of particular banking fraud laws vary depending on jurisdictions, the term bank fraud applies to actions that employ a scheme or artifice, as opposed to bank robbery or theft. For this reason, bank fraud is sometimes considered a white-collar crime.[2]

https://en.wikipedia.org/wiki/Bank_fraud

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Tuesday 21 February 2017

Financial regulation: City police - Multi £bn Asset Based Finance has no police - but many fraudsters!

April marks the fourth anniversary of a new financial regulation landscape in the UK. The Financial Conduct Authority blazed on to the scene in 2013 with a promise that there would be ‘nowhere to hide’ for financial services firms and individuals who misbehaved.
Four years on, however, some solicitors representing small business owners and punch-drunk shareholders are questioning whether anything really changed with the arrival of the new City watchdog.
 
ABFA a gumless Jelly fish 

As head of commercial litigation at complex disputes specialists Stewarts Law, Clive Zietman acted for RBS shareholders in relation to losses sustained in its April 2008 rights issue.
He told the Gazette: ‘If there was another financial crisis you would find a lot of the banks had [again] invested in products where they didn’t understand the underlying risk. You would be naive to think that it has all been cleaned up. I just don’t buy that.’
The leaden pace of redress for consumers ill-served by the sector has continued to grate. Predecessor watchdog the Financial Services Authority was criticised for its tardy handling of the payment protection insurance scandal, for example, not least because it gave birth to a vast claims management industry. It was also lambasted for repeated delays in the publication of its report into the collapse of banking group HBOS, as well as its handling of interest rate swaps mis-selling.
Alison Loveday, chief executive of Manchester-based Berg Solicitors, is acting for a number of small business clients who allegedly suffered at the hands of RBS’s controversial (and now defunct) restructuring unit. A 2013 report by Lawrence Tomlinson, former adviser to the then business secretary Vince Cable, alleged that the bank wrecked small businesses in pursuit of profit. The state-controlled bank has admitted it ‘could have done better’, but has rejected allegations it tried to profit from distress situations.
She says: ‘We were hoping that the FCA would really take hold of the [Global Restructuring Group (GRG)] dispute. Tomlinson clearly showed that something had been going on for years, but we still haven’t seen the regulator’s own report and I don’t think that puts the regulator in a good place.’
Loveday is not the only one frustrated by how long it takes the FCA to produce reviews into wrongdoing. Andrew Tyrie, chair of the Commons Treasury Select Committee, has written more than once to FCA chief executive Andrew Bailey asking for the GRG report to be published.
Meanwhile, the Treasury committee published its own report last month into what it sees as a major cause for the frequent delays – the so-called ‘Maxwellisation’ process, by which anyone criticised in a report is allowed time to challenge it before publication.
The review, carried out by Andrew Green QC and barristers from Blackstone Chambers, called for a fundamental overhaul of the practice.
Tyrie said: ‘The principle that those criticised in public reports should have an opportunity to respond is sound. Nonetheless, there is a balance to be struck to ensure fairness, both to those who may have been subject to potential wrongdoing or malpractice, and to those subject to criticism in reports.’
The review concluded that the representation process has not only been overused, but also used for inquiries other than those conducted under the Inquiries Act 2005 (rules 13 to 15). It proposes a list of guidelines for chairs of inquiries not covered by this act, with the aim of reducing the length of time it takes for reports to be published.
The report also calls on the government to revoke rules 13 to 15 as soon as possible; David Cameron’s administration agreed to look at this in July 2015, but nothing has happened since.
Publication delays can indeed be lengthy. The FSA’s report into the failure of HBOS took seven years from inception to publication, while the FCA’s report into RBS’s restructuring group began three years ago.
Loveday cannot be sure the GRG report does not contain material relevant to her own clients’ cases. She explains: ‘We don’t know what the report says and we are being told by the bank’s solicitors that it is not relevant. But how do we know until we see it?’

Continue reading:  https://www.lawgazette.co.uk/law/financial-regulation-city-police/5059488.article