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The $1.2 billion fraud alleged at Russia’s largest bank


Tucked away on page 4 of the Moscow Times today there is a remarkable article which made me wonder whether I wasn’t hallucinating.

The report states matter-of-factly that several branch managers are being investigated for defrauding $1.2 billion from Sberbank, Russia’s largest bank. That’s according to comments made by Sberbank’s regional manager for Moscow. The Moscow Times translated the article from Thursday’s edition of the Russian newspaper Vedomosti, where it appears on page 7.

According to this article, Sberbank suspects managers at three Moscow branches of doling out “thieving” loans, on the basis of “fictitious” documents, to “dubious” companies. The scale of the resulting losses at these three branches? “More than 35 billion roubles” ($1.2 billion).

When you include similar goings-on at other branches, the total figure for Sberbank’s “dubious” loans appears to be even higher still: 46.1 billion roubles, or some $1.6 billion. That it is more than double Sberbank’s total profits for last year.

Russia’s shocking corruption belies Medvedev’s tough rhetoric


Everyone knows that Russia is corrupt, but did you know just how corrupt? The short answer is: more than any other country. That, at least, is the conclusion of a survey just published by PricewaterhouseCoopers, which examines the level of economic crime around the world.


PwC canvassed more than 3,000 companies in 55 countries, 89 of them in Russia. It asked them if they had been the victim of frauds such as embezzlement, bribery and crooked accounting. Russia topped the list, with 71% of respondents reporting at least one instance of fraud during the previous twelve months.

Is UBS’s 8 million pound fine enough?


Not long ago, UBS was the pride and joy of its Swiss home. There it was, slugging it out with the big boys, and making a fair fist of joining the bulge bracket banks from New York.

That was before it all started to go wrong. The banking crisis produced a loss of $52 billion, but much worse has been the reputational damage done in that most Swiss of financial services, the discreet management of private fortunes.

The SEC’s animal house


Mary Schapiro wants her lawyers and investigators at the Securities and Exchange Commission to go back to school. Specifically, she wants them to enroll in something she calls “fraud college.”

From what I gather, the SEC’s “fraud college” will be an intensive training program to help the agency’s employees better detect fraud. It’s not the worst idea. But as Bess Levin at Dealbreaker points out it does sound a bit silly.

SEC is still fumbling the ball


Maybe someday the Securities and Exchange Commission will figure out what to do when it gets a credible tip about potential wrongdoing. But judging by the agency’s handling of a recent investor complaint, the nation’s top securities cop has a long way to go.

This tale begins in March, when an investor in Britain sent an email to Bill Singer, a New York securities lawyer, complaining about a cold call he had received from someone purporting to be from a brokerage firm in Peoria, Illinois, calling itself AJ Witherspoon & Co. The call was an effort to interest him in a transaction involving shares in a company called SecureTee International.

Alex on Stanford


Alex Dalmady, the man who got the ball rolling on R. Allen Stanford, has the last word of the day on the alleged $7 billion scamster.

Stanford: a little help from his friends


stanford3You can officially called R. Allen Stanford the alleged criminal mastermind of a giant multi-year Ponzi scheme.

Stanford’s name, of course, is all over the 21-count indictment. But the big shocker in the investigation into the $7 billion fraud involving those bogus certificates of deposit is an allegation that a top regulator in Antigua–where Stanford’s offshore bank was based–was on the take.

Sir Allen arrested


Finally. R. Allen Stanford, the alleged mastermind of the second largest Ponzi scheme on record, was arrested by the FBI on Thursday evening and will be officially criminally charged on Friday.

The criminal charges against Stanford, the Texas financier with the offshore bank in Antigua, comes nearly four months after the Securities and Exchange Commission filed civil fraud charges against him, and moved to shut-down his sprawling Houston-based financial empire.

BofA and the fraudster


Ken Lewis spent much of the day on Capitol Hill getting grilled about Bank of America’s acquisition of Merrill Lynch during the heat of the financial crisis. But Lewis may have bigger things to worry about down the road, as his bank’s past dealings with a hedge fund fraudster just won’t go away.

A federal appeal court, in a little-noticed ruling, reinstated an aiding-and-abetting claim filed against BofA by some former investors of Michael Lauer, who master-minded a billon dollar hedge fund fraud. A federal trial court judge in New York had dimissed the case against Bofa, which was the prime broker for Laurer’s $1 billion Lancer funds. But the appeals court, without determining the merits of the allegations, says the investors should be able to press ahead with their claim against the big bank.