Summary of “Did This Jeweler to the Stars Commit the Biggest Bank Fraud in India’s History?”

It was the biggest bank fraud in India’s history, and it came robed in technical jargon: letters of undertaking and Swift bypasses, margin money and “Nostro” accounts, core banking solutions and buyer’s credit facilities.
A letter of undertaking was a uniquely Indian financial instrument-a relic from the economy’s statist years, when the government controlled the flow of foreign exchange and importers could use only state-owned banks to pay suppliers abroad. India’s central bank recently eliminated them, but they were once a bank’s guarantee for a sum of money in an exchange transaction.
The second bank would then deposit the money into PNB’s nostro account, and PNB would in turn release the money to Modi’s company.
The bank said, they’d refrained from updating the bank’s database, which would have flagged the credit as unapproved and unsecured.
His company had hired two Big Four auditors and a trio of investment banks, and its staff had worked to iron out the various audit irregularities, unrelated to the alleged bank fraud, that had wrinkled its books over the years.
He urged the bank “To be fair” and argued that he ran “a legitimate luxury brand business.” He owed the bank “Substantially less” than $2 billion, he claimed, adding that after PNB had filed its first complaint, he’d offered to sell his company to settle up.
Harsh Vardhan, the head of Bain & Co.’s financial-services practice in India and a trenchant critic of how state banks are run, says he was stunned when news of the PNB fraud emerged.
If Nirav Modi ever makes it back to India, he’ll face multiple charges, including conspiring to defraud PNB and money laundering-accusations his lawyer called “Half-baked” in a statement released in May. In a way, the fraud has cost the state-run banking system not only PNB’s immediate $2 billion but also future funds.

The orginal article.

Summary of “The Biggest Digital Heist in History Isn’t Over Yet”

Since late 2013, this band of cybercriminals has penetrated the digital inner sanctums of more than 100 banks in 40 nations, including Germany, Russia, Ukraine, and the U.S., and stolen about $1.2 billion, according to Europol, the European Union’s law enforcement agency.
The string of thefts, collectively dubbed Carbanak-a mashup of a hacking program and the word “Bank”-is believed to be the biggest digital bank heist ever.
“Carbanak is the first time we saw such novel methods used to penetrate big financial institutions and their networks,” says James Chappell, co-founder and chief innovation officer of Digital Shadows Ltd., a London intelligence firm that works with the Bank of England and other lending institutions.
The Carbanak crew was looking for executives with the authority to direct the flow of money between accounts, to other lenders, and to ATMs. They were also studying when and how the bank moved money around.
As for Katana, Sanchez says he handled the most critical and complex task: He allegedly conducted the reconnaissance of banking systems and then shuffled money around the network like an air traffic controller.
“To attack a bank wasn’t about ‘Let’s steal a million dollars.’ It was, ‘Let’s crack the security the bank is putting in our way.’  ”. Earlier this year the detectives learned Katana and his partners were preparing to up their game with the release of a more potent version of Carbanak.
Unlike the bank jobs of yore, digital heists are amoeba-like ventures that divide over and over again as the malware proliferates.
In recent weeks, employees at banks in the Russian-speaking world have been receiving emails that appear to be from Kaspersky, the security company that unearthed Carbanak.

The orginal article.

Summary of “The Wealthy Are Hoarding $10 Billion of Bitcoin in Bunkers”

Two Xapo clients said it houses roughly $10 billion of Bitcoin.
“Everyone who isn’t keeping keys themselves is keeping them with Xapo,” said Ryan Radloff of CoinShares, which has more than $500 million of Bitcoin stored at Xapo.
The first rule of owning Bitcoin is to securely keep your private key – the code that lets you spend your coins.
“They’re the first folks who recognized custodial and security functions would be key,” said Hoffman, whose venture capital firm Greylock Partners led a $20 million investment in Xapo in 2014, a couple of years after Casares persuaded him to buy his first Bitcoin.
At Xapo, retrieving Bitcoin from the vault takes about two days.
The company also offers customers a trading desk to buy and sell Bitcoin and created the first Bitcoin debit card to spend it.
Xapo only safeguards Bitcoin because of Casares’s belief that it alone will succeed.
“It’s a subject we discuss a lot, and we believe Bitcoin won’t reach the mainstream if people have to hold their own private keys,” Rogers said.

The orginal article.

Summary of “A Letter to My Daughter About the Black Magic of Banking”

As you grow up and experience more of the ups and downs of the economy, you will notice a piece of mindbending hypocrisy: during the good times, bankers, entrepreneurs-rich people in general-tend to be against government.
Entrepreneurs need bankers to lend to them, who need entrepreneurs to pay interest.
Bankers need governments to protect them, who need bankers to fuel the economy.
Who has provided the government with the requisite loans? The bankers, of course! And where have the bankers found the money? I hardly need tell you that they have conjured it from thin air.
Why? Because a market society’s bankers need public debt as surely as fish need water to swim in.
When the government borrows, say, $100 million from a banker for, say, a ten-year period, in return it provides the banker with a piece of paper, an IOU, by which it legally guarantees to repay the money in ten years’ time as well as pay an additional yearly amount to the banker in interest-say, $5 million a year.
Bonds are, in bankers’ parlance, “The most liquid of assets.” As such, they lubricate the banking system to keep its cogs and wheels turning.
In bad times, when bankers pick up the phone to the government and demand that the state’s central bank bail them out, it does so not just by creating new money, as we have already seen, but also by issuing even more bonds and using them to borrow more money from other bankers, often foreign ones, to pass on to the local bankers.

The orginal article.

Summary of “24-Year-Old Australian Man Spent $2 Million After a Bank Glitch”

While his mates were out drunkenly hunting wild boar, Milky was investing in hedge funds, and at nineteen he bought his own home, for himself and his high school sweetheart, Megan.
With no money in the bank, Milky was bracing himself for the beginning of the end.
Oh, and a cranky old red Alfa Romeo-which Milky had bought shortly before moving there in July 2011.
Milky had no idea how he had gotten caught-perhaps someone at the bank had finally taken notice, or maybe someone on the receiving end of his large purchases had raised concerns.
“The bank is now seeking to recover funds.” The police confiscated Milky’s belongings and turned them over to the bank.
According to Milky’s contract with the bank, he was perfectly authorized to receive overdrafts subject to the bank’s approval.
In practice, when Milky put in an overdraft request, it would get sent up from his local bank to a corporate “Relationship officer” for sign-off.
“The unusual aspect of Mr. Moore’s conduct was that there was nothing covert about it,” Justice Mark Leeming noted in his judgment, adding that St. George bank had chronicled “With complete accuracy Mr. Moore’s growing indebtedness.” St. George declined to comment on the acquittal, though it later contacted Milky to tell him it was not coming after him for his remaining debt.

The orginal article.

Summary of “How Puerto Rico’s Debt Created A Perfect Storm Before The Storm”

How Puerto Rico’s Debt Created A Perfect Storm Before The Storm For years, the nation’s largest banks made millions off Puerto Rican debt as the island approached financial ruin.
Before Hurricane Maria hit last September, Puerto Rico was battered by the forces of another storm – a financial storm.
Banks involved in Puerto Rican finances declined NPR and Frontline’s requests for an interview but said in statements that they have done nothing but try to help Puerto Rico when it was in need of money.
You can listen to part one of the NPR investigation, which details how Puerto Rico descended into financial ruin before the storm even hit, at the top of this page or here.
“Fund managers, they will not admit this now, but when Puerto Rico was selling debt like pancakes, they loved Puerto Rico debt,” Marxuach said.
“All the major banks in New York would come to Puerto Rico on a regular basis to pitch deals,” said Capacete, a former branch manager for UBS, the largest broker-dealer in Puerto Rico.
In statements, banks said that they fully disclosed their financial stake in the deal and did not influence how Puerto Rico used the money.
Fifteen months later, Puerto Rico announced it couldn’t pay its debt.

The orginal article.

Summary of “Inside the World’s Most Elite Traders’ Club”

It has no name and no board of directors but has a roster drawn from the world’s wealthiest and most successful traders.
“It would be something for famous traders or investors with significant personal wealth who would have no trouble posting large amounts of collateral.”
To trade swaps and other OTC contracts with Citigroup, an individual must have a net worth of at least $25 million, $5 million or more of which must be deposited in an account with the bank, according to people familiar with the matter.
The Finnish native, who was a member of Pimco’s investment committee and head of global risk oversight at the company, traded interest-rate swaps and currency derivatives with the U.S. banks between leaving Pimco and joining Capital Group Cos.
Kieran Goodwin, the former head trader at King Street Capital Management, traded with an ISDA between leaving the fund in 2010 and starting his own firm in 2012, New York-based Panning Capital Management, according to a person familiar with the matter.
Rules created to prevent another crisis have increased capital costs for lenders trading derivatives that are not processed through a clearinghouse; what’s more, lawsuits that focused on mis-selling of derivatives prodded banks to be more selective with whom they are willing to trade.
In some cases, bank employees have been able to obtain ISDAs to trade with their employers, an arrangement typically facilitated by the bank’s wealth-management unit.
“I got the ISDA because I’m a prop trader at heart and needed to be able to invest and was pretty restricted on the desk in terms of what I was allowed to invest in,” said Wang, who signed a separate agreement with Bank of America Corp.The set-up whereby a bank trades with its staff can create potential conflicts of interest, such as when junior colleagues are leaned on to give their seniors a good price on personal trades, which can be processed through the same desk as client orders, according to people familiar with the matter.

The orginal article.

Summary of “Wall Street’s Biggest Gender Lawsuit Is 13 Years in the Making”

Dermody was relaying news that Chen-Oster, a former vice president at Goldman Sachs, had been awaiting for years.
A federal judge in New York had ruled that she and three other women who claim there’s systematic gender discrimination at Goldman can now represent as many as 2,300 other current and former employees.
A few months before Chen-Oster left Goldman, rival investment bank Morgan Stanley agreed to settle a sex discrimination case for $54 million.
Chen-Oster, the bank argued, hadn’t made it clear from the beginning that she was suing on behalf of other women and it called out her use of “Me” and “My” in her complaint to the EEOC. Goldman lost that one.
Goldman used the Dukes case to attack, saying Chen-Oster’s was so similar that it should be dismissed without wasting the court’s time.
If Chen-Oster wanted Goldman to change, it looked like she’d have to get current bank employees to join her case.
In the decision Chen-Oster would read in a Broadway theater, she ruled that Chen-Oster, Orlich, Gamba, and De Luis could represent female associates and vice presidents who have worked in three divisions at Goldman in the U.S. since September 2004 and in New York since July 2002.
In a telling sign of where things stand for women on Wall Street, Goldman bragged that its 2016 partner class was 23 percent female, its most diverse yet.

The orginal article.