By Troublemaker
Downloading PDF. Please wait... Issue 2786

NatWest Bank bosses admit ‘spoofing’ to fix the markets

It includes stockmarket scams and Michael Gove filling potholes
Issue 2786
Screens at the stock wxchange

Looking at market mayhem (Pic: Flickr/Rafael Mutsange)

NatWest bank has pleaded guilty to ­fraudulently “spoofing” to manipulate US Treasury markets for around six years.

The spoof orders were designed to artificially push up or down the ­prevailing market price so that the NatWest traders could trade more profitably.

According to court ­documents, a trader in London in 2011 admitted to a colleague via electronic chat that he was spoofing, adding, “I was doing a lot of that last week and was saying to myself, gonna get caught soon, should stop.”

In a call discussing the complaint, a supervisor told a trader, “In a Darwinian sense I don’t have any issue with it [providing fake market signals]. If they cut us off because of your activity . . . then I do have a ­problem with it”.

The supervisor later advised the trader on how to hide what authorities called “his fraudulent scheme”, according to court documents.

The offences took place during 2008-14 and then separately in a different section in 2018. NatWest is a repeat offender. The latest ­wrongdoing marked a ­“material breach” of a non‑prosecution ­agreement that a NatWest US broker subsidiary had reached in 2017.

It admitted defrauding ­customers in ­mortgage‑backed securities. The bank in 2018 was also on probation after pleading guilty in 2015 for conspiring to manipulate the foreign exchange market. It will pay a £26 million fine for the latest crimes, not much out of profits of over £1 ­billion for just three months of last year.

The US verdict came a few days after the bank faced legal action in Britain. NatWest Markets’ parent group paid a £265 million fine for breaching anti-money laundering regulations between November 2012 and June 2016. But, as Troublemaker ­predicted when the case was first publicised, no directors suffered. The bank remains ­majority owned by the British ­government, 13 years after it was taken over during the financial crisis.

The directors should be sacked, and then prosecuted.

Rich give less to charity

Charitable donations by Britain’s wealthiest earners fell by more than 20 percent during the past decade even as their income increased significantly.

A report from the Law Family Commission on Civil Society found that average donations by the top 1 percent of earners fell by just over a fifth in real terms from the end of the 2011‑12 tax year to 2018-19. At the same time, the group’s income rose by 10 percent. It said that the average income of the top 1 percent rose from £247,000 to £271,000, while donations fell from £680 to £538 on average. However, poorer people gave more. Total charitable donations, including legacies and fundraising, rose from £14.8 billion to £19.6 billion over the eight year period.

Water firms shit spending

Britain’s water and sewage companies have slashed investment in critical infrastructure by up to a fifth in the 30 years since they were privatised. Total spending on important infrastructure fell by 15 percent just between 2020 and 2021, according to a Financial Times analysis of the accounts of the ten largest providers in England and Wales. The reductions have come despite a 31 percent real-term increase in water bills since the 1990s—an average of £100 a year per household. That meant £72 billion in dividend payments to shareholders in the same period.

Stock markets 2021 rocket

Global stock markets finished 2021 with double‑digit gains for the third year in a row. This reflects big companies boosted by cheap credit pumped out by governments and support payments. The FTSE All-World share index rose 16.7 percent in dollar terms in 2021, surpassing the previous year’s 14.1 percent increase. “It has been incredible,” said Kristina Hooper, chief global market strategist at Invesco funds management firm. “Monetary policy, fiscal stimulus and the vaccine rollouts have been powerful engines for stocks.”

Donald Trump’s loss-making Scottish golf resorts claimed in excess of £3.3 million in emergency support from the British government, to help furlough staff during the Covid pandemic. Company accounts for the former president’s resorts at Turnberry in Ayrshire and Balmedie, north of Aberdeen, show his businesses cut 273 jobs due to the Covid crisis last year, while also claiming £2.8 million in furlough support. Trump Turnberry and Trump International Scotland in Aberdeenshire then made further claims while the government’s job retention scheme was still in force.

A senior banker is set to become NHS England’s boss. Richard Meddings, ex-chair of TSB Bank and non-exec director at the Treasury, is ministers’ choice. He will be paid £63,000 a year for working two to three days a week. Whitehall source says has “unrivalled business experience” and will bring an “outsider’s eye” to the NHS. He is not thought to have any health service experience.

Balfour Beatty guilty of fraud on US military

A subsidiary of Britain’s largest construction company, Balfour Beatty, is to pay £48 million in penalties and restitution after pleading guilty to fraud.

The US Department of Justice (DoJ) investigated performance incentive fees claimed by Balfour Beatty Communities between 2013 and 2019 following maintenance work at US military housing installations.

Balfour Beatty Communities operated privatised military housing at air force, navy and army bases across the US, earning fees for development and management.

It falsified information to claim that it had met performance objectives. “Instead of promptly repairing housing for US service members as required, Balfour Beatty Communities lied about the repairs to pocket millions of dollars in performance bonuses,” said Deputy Attorney General Lisa O Monaco.

“This pervasive fraud was a consequence of [the company’s] broken corporate culture, which valued profit over the welfare of service members,” she said.Michael Gove levels up Lord’s pot holes

Michael Gove levels up Lord’s pot holes

The Department for Levelling Up, Housing and Communities, run by Michael Gove, gave £330,000 of public money to fix potholes on the driveway of a former Tory peer’s country estate.

The six-figure sum from the £900 million Getting Building Fund was spent on repairing an access track to the East Sussex home of Viscount Gage.

The government said this will help to improve the local economy.

The funds were used to do up the road leading to Charleston within the grounds of his Firle Estate in the South Downs national park.

Gage owns seven farms and a £10 million Tudor manor house on the estate just over a mile away from the repaired track.

Things they say

‘We do not want to go OTT on this’

Newly released documents show that as prime minister Tony Blair vetoed a proposed strategy to tackle racial inequality following the racist murder of Stephen Lawrence

‘Congratulations to Tony Blair on this recognition for his public service to our country’

Labour Party leader Sir Keir Starmer on Tony Blair being knighted for murdering Iraqi people

‘Services to philanthropy’

The reason hedge fund boss David Harding was knighted for the more than £1.5 million he has gifted the Tories since 2006

‘Deeply unsatisfactory’

Lord Geidt describes the situation which sees the peer set to clear Boris Johnson again of any wrongdoing on getting people to pay to do up his flat

‘Every penny received is used to support the running of my office and my work as an MP’

Labour MP Dan Jarvis filled in 29 surveys earning nearly £3,000 plus £120 in Amazon vouchers

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