By Toby Harnden
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Resigned: American Barclays Chief Executive Bob Diamond has quit over the scandal
An American lawyer leading a class action suit in the United States has said that Barclays and other banks accused of rigging the Libor lending rate could be liable for hundreds of billions of dollars in damages.
‘There are thousands if not tens of thousands of entities that could possibly have a claim,’ said Michael Hausfeld, whose Washington-based firm Hausfeld LLP is co-leading the anti-trust class action case against 21 financial institutions.
His firm is receiving ‘inquiries on an hourly basis’ from potential plaintiffs seeking to join the 33 individuals and companies named in the class action, which was filed in New York in April.
Hausfeld LLP is also poised to launch legal actions in Asia and Europe, including the UK.
The New York suit states that the institutions named ‘and their co-conspirators engaged in a continuing agreement, understanding, or conspiracy in restraint of trade to artificially fix, maintain, suppress and stabilize Libor and thus the prices and rates of return on Libor-based derivatives sold by them’.
In an interview with MailOnline, Hausfeld said: ‘The total aggregate [of transactions] would be approximately in the trillions of dollars. Small movements in the base’s points could produce millions if not tens of millions or billions of dollars in damage.’
He described the resignation of Barclays chief executive Bob Diamond on Tuesday as ‘a sign of the egregiousness of the conduct that occurred under his watch’. The record $451.4 million penalties imposed by regulators in Britain and the US last week represented ‘a game changer’, he said.
‘Basically it's foreclosing the participating banks from denying they engaged in any wrongful activity. It clearly is well demonstrated that there is almost a fanciful attitude on the part of the traders in terms of dealing with financial instruments and corrupting market integrity.’
In striking a deal with the US Department of Justice to admit wrongdoing, Barclays ensured it would not be prosecuted in return for cooperating with the ongoing criminal investigation into other banks and individual one-time Barclays employees, some 14 of whom are being scrutinised by the FBI.
‘It underscores the old adage that there may not be honour among thieves. Barclays had the ability to make a good deal for itself…Historically, those entities that exit early in criminal proceedings do better than those that linger,’ Hausfeld said.
Claims: Hausfeld said that Barclays and other banks accused of rigging the Libor lending rate could be liable for billions of dollars in damages (file photo)
The US Commodity Futures Trading Commission (CFTC) agency is understood to have started investigating Libor rates in May 2008. Concerns were then heightened during the global financial crisis the following autumn when the rate rose sharply due to stresses in the banking system and then dropped back suspiciously.
In spring 2010 the CFTC, which had by then been contacted by a whistleblower, brought in the UK’s Financial Services Authority (FSA) and presented it with powerful evidence of manipulation.
Since then, the investigation has pulled in nearly a dozen regulators and more than 20 banks and brokerage firms across three continents. With civil litigation in the US gathering steam, current and former US regulatory officials said that extraditions and criminal prosecutions were likely.
‘Extraditions are certainly a possibility if the Department of Justice [DoJ] isn’t done yet,’ a former US government regulatory official said. ‘The CFTC and SEC [Securities and Exchange Commission] are part of the civil authorities. They sue people, fine them and seize assets. The DoJ is criminal so they arrest people and throw them in jail.’
Suit: Michael Hausfeld (pictured) has a firm Hausfeld LLP that is co-leading the anti-trust class action case against 21 financial institutions
Professor William Black of the University of Missouri-Kansas City, author of ‘The Best Way to Rob a Bank is to Own One’, said US litigation could be the ‘biggest thing in the history of anti-trust by orders of magnitude’ and punitive damages ‘could bring down any British bank because Americans are big enough players’.
The scale of the alleged conspiracy to fix the rates raise the prospects of top Barclays officers and senior figures from other banks being tried in high-profile ‘white collar crime’ cases in which they are held up as personifications of the avaricious excesses of Wall Street and the City of London.
Black said that the US remained ‘tougher against elites than anybody else in the world’, noting the 1,000 felony convictions in the Savings & Loans scandal in the 1980s and 1990s and the 60 connected to Enron in the following decade.
Ulster Bank customers face financial hardship - BBC News
The continuing problems resulting from technical failures at RBS, the parent company of Ulster Bank, have left many customers in Northern Ireland unable to access cash or pay their bills.
Businesses have also been affected since the bank's computer system failed on 19 June.
Mark - partner in small family business
"We keep everything well balanced, what comes in, goes in," he said.
"We just get a wage, we just get by.
"I have customers that owe me and they're with the Ulster Bank but I don't bank with the Ulster, I'm with Santander.
"All I want is to be able to run my business and feed my family, to be able to take a wage home.
"I can't go to my suppliers and say to them, I can't pay you for another couple of weeks because some of my customers can't pay me. What if I lose an agency that is giving me business?
Cathal Hagan - owner of H2 Engineering, Dungannon
"Roughly three weeks ago Ulster Bank took the BACS (Banker's Automated Clearing Services') payments out," he said.
"I have 25 employees at my Dungannon branch, the BACS payments came out and went to Ulster Bank but they did not transfer it onto my employees, so it hasn't gone into their accounts.
"When they went on Friday evening to take out their money, there was no money in their accounts, yet it has come out of H2 Engineering's account.
"I've had to pay them twice.
"If you take that my average employee is getting around £300 a week, multiply that by 25, that is only one of my companies.
"We have a viable business, but I do know others who are in a difficult position at the minute and if it keeps going, they'll be crucified.
Mum-of-two Natalie
"I've had two payments of tax credits and one payment from my wages and I haven't been able to collect a single penny of it," she said.
"The cash machine is actually saying that I'm in the red, but I have £600 in the bank.
"I'm coming down to the bank constantly, trying to get seen, but between work and kids, you haven't got enough time, as you're rushing back to work or to the kids.
"They're opening their branches a bit longer, but they could be doing a lot more.
"They should have had it fixed by now. This length of time for a bank to be closed is absolutely ridiculous.
"People need their money, people are out there working, they have a right to access their own money."
Financial advice firm Honister puts itself in administration - Bristol Evening Post
A BRISTOL-based financial services firm has gone into administration, putting around 130 jobs at risk.
Honister Capital was forced to call in administrator Grant Thornton after it emerged it could no longer find insurance to cover its various financial policies.
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Honister Capital
As well as the staff employed at the company's headquarters in the city, the future of 900 self-employed independent financial advisers it worked with has also been thrown into doubt.
Bristol-based accountancy firm Grant Thornton was called in yesterday to act as administrator.
Honister Capital had been put up for sale several months ago but no buyer had come forward. The lack of interest in the company led to the insurance brokers getting cold feet and ultimately causing the firm's downfall.
Many of the IFAs working with Honister have been left angry with the way the administration was handled.
They have found themselves locked out of their e-mail accounts and unable to contact worried clients.
However, Grant Thornton has moved to reassure people who had accounts with the firm that their investments are still safe.
Honister chief executive Colman Moher wrote to staff yesterday.
He said: "Due to the history of some of our businesses, we have been exposed to large claims relating to business written by advisers who have long since left us and this has severely affected the premiums we have had to pay.
"The business has had no choice but to enter in administration and consequently you are no longer able to write new business with immediate effect.
"We know that this is an extremely difficult situation for you and we cannot express strongly enough our regret. Despite considerable efforts on our part to resolve this, we have been unable to prevent this situation from arising."
The company has been through a torrid 12 months. Last year it had to make widespread staff cuts and chief executive Richard Pearson stepped down after less than a year in charge.
Nigel Morrison, Alistair Wardell and Richard White of Grant Thornton UK have been appointed joint administrators of the firm.
Mr Morrison said: "It is unfortunate that the only course of action possible in this situation for the group is an orderly wind-down.
"The administrators will be keeping on key members of the group's workforce in order to assist us with the wind-down of the business.
"The group will not be trading in administration and members of the network will not be able to offer financial advice to their clients.
"No customer should be disadvantaged, as the group does not hold client monies, although I would urge any customer who has paid for but not yet received a financial product to contact the product provider in due course."
Kashmir Hospital Gets Some Monkey Business - Wall Street Journal
By WSJ Staff
Forgive us for indulging in yet another India monkey story, but sometimes it’s too difficult to resist. A picture says a thousand words, but this video says many more, starting with “What the..?”
In a government hospital ward in Jammu, the winter capital of Jammu and Kashmir, a large monkey lolls on a bed, flat on its back and oblivious to the world around. A couple of meters from the sleepy simian, two human patients appear to be sharing a bed.
The monkey stirs from its nap, but only for a scratch, a yawn and to brush away a fly. That’s the only disruption the animal faces. The humans in the background carry on their daily business, seemingly unconcerned about their new room-mate.
According to television channel NDTV, the monkey had come in search of food and dozed on the bed for more than three hours. And the monkey wasn’t the only unconventional guest at the government medical college, with other television footage showing dogs sat in the hospital corridors.
“The monkey is on the next bed and four or five dogs are roaming outside, the hospital looks like a zoo,” NDTV quoted a patient as saying.
An official from the hospital told India Real Time that the incident occurred “five or six days ago,” but he didn’t comment further on the matter.
Omar Abdullah, the chief minister of Jammu and Kashmir, reacted to the news Tuesday evening on Twitter, saying he was “shocked” by the images of the monkey.
“Before I say anything I owe it to my Minister to first ask him to explain,” he said, adding that he would save his thoughts for a cabinet meeting Wednesday and then share his views.
It’s unclear which minister Mr. Abdullah will be asking to explain himself, given that the state has at least three ministers whose responsibilities would appear to cross into health care: Sham Lal Sharma is Minister for Health, Horticulture and Floriculture; Rajinder Chib is Minister for Medical Education; Javaid Ahmad Dar is Minister of State Health and Medical Education, Floriculture, Horticulture and Agriculture, according to the state government website.
All of which sounds a little to us like….monkey business.
Follow India Real Time on Twitter @indiarealtime.
Business: Government delivers better access to business mentors - eGov Monitor
A drive by the Government to help people find a business mentor, increase the number of mentors available and improve information about mentoring to help UK businesses to grow, has made significant progress in the last year.
Work began in July last year when the Department for Business, Innovation and Skills (BIS) joined forces with the British Bankers Association (BBA) to launch Mentorsme.co.uk, the national mentoring portal. At the time, the Government made three pledges to:
Make it easier for people to find a business mentor.
Increase the supply of business mentors.
Stimulate a greater demand for using mentors.
Since then, the number of mentoring organisations on the portal has risen from 42 to over 100, and through them there is now access to around 11,000 mentors. The site is proving popular, with the BBAs statistics showing there were over 100,000 visits to the site in the last year.
The work to recruit volunteer business mentors is also proving successful. Over 12,000 people have now signed up to the Small Firms Enterprise Development Initiatives (SFEDI) Get Mentoring scheme, which has pledged to recruit and train 15,000 business mentors. So far over 7,000 people have been trained and they are now being encouraged to become part of mentoring organisations on the mentorsme portal and start mentoring through their own networks.
Business and Enterprise Minister Mark Prisk said:
Mentoring is a vital part of helping entrepreneurs start and grow their business as people want to get support from someone who has been there and done it before. We know that people who use support such as the type theyd receive from a mentor are more likely to survive and prosper.
A year ago, we pledged to encourage more people to use a business mentor and to increase the supply of volunteer mentors recruited from the business community, which we have achieved.
The Government remains committed to working with partners to develop the network of business mentors, who contribute so much to the growth of the small business community. There is still much work to be done, and we have aspirations to recruit and train thousands more business mentors who can help companies grow and boost the UK economy.
To accompany this push, the BBA has met the commitment of providing 1,000 trained volunteer business mentors, who are now accessible through mentoring organisations on the portal.
Big businesses have also recognised the benefits that business mentoring schemes can bring to their own organisations, at the same time as helping smaller businesses grow and prosper.
New schemes to recruit volunteer business mentors have been launched by Hewlett Packard and Mott MacDonald, who are joining the likes of Virgin Media and A.F Blakemore & Sons, in collaboration with the Enterprise and Diversity Alliance (EDA), which already run established volunteer mentoring programmes.
As part of the aim to raise the profile of support available for entrepreneurs, the Government is running the Business in You campaign alongside the private sector. The campaign is helping even more people to find out about mentoring and how it can have a positive effect on businesses.
Performance Engineered Solutions Ltd in Sheffield, Yorkshire, is a growing design company and has benefited from the experience of a mentor.
Co-founder Mike Maddock said:
We wanted to get a mentor so they would be able to challenge some of the decisions we were making. Our mentor helped to establish where we were going, what our strategy for the next three to five years was, how we were looking to fund that strategy and what our expectations for growth and sales were. Those are things we kept promising ourselves we would do, but when you are busy working in the here and now of your business, you need somebody to really tie you down and make you focus on those things.
The Government aims to have a network of 26,000 mentors by September 2012. To sign up to Get Mentoring visit www.getmentoring.org and to find out about finding a business mentor, visitwww.mentorsme.co.uk.
The Government has also launched the 82.5 million StartUp Loan scheme that will provide young people aged 18-24 with a range of business support, including mentoring, as well access to a small amount of capital to help start their business. To find out more visitwww.startupbritain.org/loans.
Business Barometer® - Small business confidence continues to fall in June - CNW Group
TORONTO, July 4, 2012 /CNW/ - Confidence among Canada's small- and medium-size businesses continued to fall in June, according to the Canadian Federation of Independent Business (CFIB). The Business Barometer® index dropped from 64.8 in May to 62.1, essentially wiping out the gains made since last summer when major concerns about Europe's debt situation had burst open.
"The weight of concern over the prospects for world economies continues to push business confidence down in Canada," said Ted Mallett, CFIB's chief economist and vice-president. "If there is any good news, it is that our numbers suggest the economy is still growing, albeit at a slow pace."
Business owners in Alberta (73.3) and Saskatchewan (72.5) have collectively been the most optimistic in Canada for 11 consecutive months, while entrepreneurs in Manitoba (65.9), New Brunswick (65.7) and British Columbia (65.6) are comfortably above the national average, and those in Newfoundland and Labrador (61.3) are close to average. Optimism is lagging in Ontario (60.7), Quebec (59.7), Prince Edward Island (59.5) and Nova Scotia (56.4).
"Insufficient customer demand was the most commonly cited constraint on business performance, although concerns about customer demand have gradually trended downward in 2012," added Mallett. "Meanwhile, concerns over shortages of working capital have increased slightly through the year, and about one business in four appears to have significant difficulties in finding necessary credit."
Declining confidence is prompting business owners to become more conservative in their hiring plans: 15 per cent of business owners expect to increase full-time staffing levels in the next three to four months (compared to 21 per cent who said the same in May), while 12 per cent said they will cut back (versus 10 per cent in May). Overall, 40 per cent of business owners described their state of business to be in "good" shape, about three-times the 12 per cent who said their state of business is "bad."
Measured on a scale of 0 and 100, an index level above 50 means owners expecting their businesses' performance to be stronger in the next year outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 70 when the economy is growing at its potential. The June 2012 findings are based on 748 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Findings are statistically accurate to +/- 3.6 per cent 19 times in 20.
As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 109,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.
For further information:
For more information or to arrange an interview with Ted Mallett, contact Meghan Carrington at 416 222-8022 or email public.affairs@cfib.ca
Does anyone believe that this is the last exposure about Bankers misdemeanour's we will get to hear about? I know of a least one other where Banking/Mortgage companies are failing to adhere to Statute Law requirements for the issue of a valid mortgage & have been for years. County Courts are issuing possession orders ignoring Statute Law throwing families on to the street without any validity in the decision. An absolute disgrace! There is Case Law supporting the appeals by certain individuals overturning the CC's decisions but more adherence is necessary. Even Cousins Law on Mortgage & Chitty on Contracts state the legal requirements for a valid mortgage but the information is being totally ignored by Banks/Mortgage companies. The banks are getting away with theft. Once this comes out it will make the LIBOR controversy small fry & the banks, as most of them own the Mortgage Companies, will be making more excuses to prop themselves up.
- Tony, Ewloe, Flintshire, 04/7/2012 15:36
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