Banking crime blog goes viral – Bank fraud now an electoral issue!

The blog I posted yesterday which dealt with the almost universal recognition at the Cambridge Financial Crime Symposium of banking crime as organised enterprise crime, has clearly not fallen on deaf ears.

As a result of the response to my piece, I decided to further test the state of play by tweeting “...Now, the Labour Party are free to openly express their repugnance of the UK banking sector. City crime is an electoral issue for once!...”

My Twitter account ( @RowanBosworth ) has gone wild, with all the shares and re-tweets of my blog. People I have never heard of are contacting me to tell me their stories of their treatment at the hands of the banking criminals.

One poor woman who had owned a thriving practice, wrote to me to tell me of the half-million pound swap derivative she had been stuffed into by one of our ethically-challenged banks and how they and their scum-sucking lawyers were making her life a misery seeking to evict her and make her bankrupt.

I estimate there must be many hundreds if not thousands of ordinary business people out there who have suffered similar treatment at the hands of these pariah criminal banking gangs.

This level of organised crime has gone on almost unnoticed, as our joint attentions have been otherwise focused on such issues as LIBOR manipulation, PPI fraud, Forex fraud, money laundering and insider dealing.

It seems incredible, even now, to think that we are talking about the traditional British banking sector, but there you are, that’s the way it is! 

Whenever issues such as these are raised, the usual response from Parliament or Ministers or Civil Servants is that they have or have had no knowledge or information regarding the existence of such financial criminality in the financial sector, and that if any such wrong-doing is going on, it is the work of a few rogue traders or rotten apples, but that the vast majority of the banking sector practitioners are honest and honourable people.

Well, I don’t believe that now, and I didn’t believe it, back in August 2012, when I submitted a written response to the Parliamentary Commission on Banking Standards.

This massive enquiry sought to review standards in banking and to make recommendations to Parliament for processes for change.

I started my response by adopting the required format as laid down in the rules for the submission of such documents. I wrote:

“...The views and opinions expressed in this paper are entirely those of the author and reflect no other agency, department or company.

Summary                       

• This paper makes the assertion that the British Banking Industry has become identical with an Organised Criminal Enterprise.
• It examines the nature of the criminogenic personality and determines the kind of person who is more likely to break the criminal law and why.
• It asserts that this state of affairs has been allowed to develop because of the failure of the regulatory process to develop the necessary skills and knowledge of the conduct of criminals to enable them to deal professionally with the misdeeds of the banking sector and the reluctance of the regulators to use their statutory powers effectively.
•  It defines why there needs to be a far greater degree of criminal prosecution brought against financial practitioners and explains why such processes are among the only penalties that such practitioners truly fear...”

I set out a fairly cogent statement making the point that the ‘...British Banking Industry has become identical with an Organised Criminal Enterprise...’

I then proceeded to set out my reasoned arguments why I believed the banking industry had become such a criminal enterprise.

I began by applying three independent definitions of Organised Crime, and followed this with some observations of my own. I wrote:

"...Organised crime is a structure that includes two or more people whose purpose is to commit one or more serious crimes or offences for financial gain or material benefit..." (Australia)

"...It is serious crime planned and carried out by a group of at least three people to benefit one or more members of the group...! (Canada)

"...Organised crime constitutes any enterprise, or group of persons, engaged in continuing illegal activities which has as its primary purpose the generation of profits, irrespective of national boundaries... (UK)

The British banking sector has become an organised criminal enterprise which has been allowed to develop because of the criminogenic environment in which it functions, which has resulted from the absence of any meaningful regulation which those who control and manage the banks would fear.

In this organised criminal category I include the various mis-selling cases, including pensions, PPI Insurance and interest rate swap derivatives; the criminal manipulation by Barclays and other banks of the LIBOR interest rate structures; the institutionalised level of money laundering as identified in the HSBC case; the serial abuse of the US sanctions provisions as indicated in the Standard Chartered Bank case; as well as many other examples of criminal actions such as theft of client funds, teeming and lading, abuse of client instructions, insider dealing, front running, churning, and market manipulation which have become the subject of international regulatory interventions.

If the recent financial devastation in UK financial markets has taught us anything, one qualifier stands out above all the rest of the explanations. The effective ‘regulation’ of the market in financial services in the United Kingdom, particularly in the areas of preventing and forestalling commercial activity which has the capability to undermine the well-being of the financial market, in which I include not only financial criminality and money laundering, but also the pro-active identification and prevention  of financial damage has, to all intents and purposes, totally failed.

 It has failed despite the huge bureaucratic organisation which has been created for its control, because those who are employed to provide the regulatory oversight of the market, the Lead Regulator, the Financial Services Authority, and the subordinate compliance officers within the individual regulated member firms, do not and have never understood the true nature of the criminogenic personality of so many of those who profess the trade of financial practitioner, nor do they exhibit any great inclination to wish to deal with the egregious activities of these individuals in a 'policing' manner…”

The rest of the 85 paragraph report was sent to the Banking Commission on line.

The Report was cynically not circulated by the Secretariat, but its contents were deliberately suppressed and the staff of the Commission denied they had ever received it.

After a series of conflicting conversations, I was advised that the report had not been submitted to members of the Committee because ‘…the banks would not like its contents…’ I pointed out that this was the least of my concerns and that I believed the Committee should know of the report. I was told that it would need to be subject to significant redactions, before it could be circulated.

It was only after I wrote to the Chair of the Committee, Andrew Tyrie and told him of my concerns that my report was being deliberately suppressed that it was eventually circulated in February 2013.

Even so, the existence of my report and the fact that it had been submitted in written form was not reported in the list of submitted evidence, and I was later told in a letter  dated 2^nd July 2013, that this was as a result of an ‘administrative oversight’.

Of course, I naturally believe that!

I was also told by the Chairman that “ We read your submission with interest…although it was circulated some time after you submitted it… “

He also said that my submissions “…would be added to the electronic copies of the report and a hard copy would be added to the printed volumes of the report. I have asked the Commission staff to inform you when this has taken place…”

I am still waiting for their confirmation.

I do not believe that it is the function of Government servants to decide what evidence a Select Committee should or should not see and read. It is a measure of the arrogance of our public servants that they could have done this. Worse, it is an example of how such servants can and will suppress evidence and information which they don’t like or which runs counter to accepted wisdom.

Many of the people with whom I have communicated over the fraudulent sale of derivative products, the members of the SME Alliance, have openly commented upon the fact that detailed evidence which they have submitted to Government agencies to support their claims of fraud and wrongdoing, have either just disappeared into an official black hole, or have been ignored or worse, denied.

We have to come to terms with the fact that the protection of these criminal banks has now become a number one priority for the Tory government. It is no longer merely a scandalous suggestion to make that the Prime Minister and the Chancellor do not want to hear evidence of their crimes, it is a fact. This Government cannot afford to admit that much of the money that comes into GB plc from the City, is or are the proceeds of downright fraud and financial crime.

This is why they insist on maintaining the obscure shibboleth that most banking crime is only ‘mis-selling’, because it is easier to ignore the wanton criminality present in the actions of bankers when you submit it to the emollient terms of being just a minor contractual breach.

It is no such thing, it is downright fraud of the worst and most blatant kind, and frankly, I do not understand how Cameron and Osborne can go on receiving this stolen money into the Government’s coffers before they are accused of an institutionalized exercise in money laundering by the Government.

This is why such reports as mine are suppressed, denied and covered up, because these men do not want to hear the truth of what passes for ordinary commercial business in the City of London.

If they were to start to take words like mine seriously, then they would be forced to do something about it, but as we all learned in Cambridge this year, despite the fact that we have a whole series of agencies whose function is allegedly dedicated to dealing with financial crime, none of them want to get involved if they can possibly find a convenient excuse for not taking on the allegation.

Our anti-fraud and financial regulatory process is a farce, and the plethora of agencies out there masquerading as providing an anti-fraud function, are simply not fit for purpose.

That is why I assert that financial crime and banking wrong-doing has now become a major electoral issue. It was no point in trying to get the previous Labour administration to take such a case on because so many of their leaders were implicated in conniving at the smoke and mirrors arrangements created between the City and the Government.

The reformed Labour opposition should be in a position to see where the crimes have been committed and we must hope that they will see the value in engaging with this scandal head on.