Homeowner who had not missed a single payment told to repay mortgage or face repossession
Homeowners who have not missed a single mortgage repayment could still be threatened with repossession.
The warning came after Royal Bank of Scotland (RBS), which is majority-owned by the Government, wrote to customers Peter and Marian Addyman insisting a £226,000 mortgage was paid back within 30 days. The letter threatened repossession if the cash was not found, even though the couple have not missed a single mortgage repayment.
NatWest, which is owned by RBS, has refused to explained why the mortgage was being withdrawn.
The Council of Mortgage Lenders (CML), the trade body which represents UK mortgage lenders, said yesterday that a clause allowing lenders to demand that a mortgage is repaid at short notice exists in the small print of almost every mortgage issued in the UK.
However, it said that the clause was only meant to cover exceptional circumstances.
Consumer groups said they were shocked by the behaviour of NatWest.
Peter Vicary-Smith, chief executive of Which?, the consumer association, said: “How can a family that has seemingly done nothing wrong face losing their home without any explanation from the bank?
"The customer has a right to know what the problem is before they’re threatened with losing their home. All that has been said is that there are exception circumstances surrounding the case, but it has not explained what these are. Other homeowners are bound to worry that they may also fall into the same category.”
Gordon Brown has told lenders that repossession must be a “last resort” and has put in place new rules ensuring that courts insist that every possible alternative has been explored before granting a repossession order.
At the beginning of this month, RBS announced that it would wait six months before threatening a customer who was in arrears with repossession.
The CML expects a huge surge in the number of people who loose their homes. It predicts that 75,000 homes will be repossessed next year and half a million homeowners will be at least three months in arrears on their mortgage repayments.
The Financial Ombudsman Service is examining the case of the Addymans, who live in St Leonards-On-Sea, East Sussex with two sons aged 12 and 15.
NatWest wrote to the couple in September, informing the homeowners that their mortgage had been withdrawn. It requested the couple find a new deal in 30 days and repay the entire home loan.
The last letter the couple received from NatWest was dated December 10, demanding that the couple pay the £225,940 debt in seven days or face repossession proceedings.
Mr Addyman, 32, who is a pharmacist and his wife, who works in a mental health unit, bought their new-build five-bedroom property for £250,000 in 2004. The couple have a second loan secured against their home, which they have lived in since 2004, for £100,000. However, this was taken out before the NatWest mortgage and was disclosed to the bank.
When their initial mortgage deal expired at the beginning of the year, they took out a new interest-only tracker loan 0.04 per cent above the Bank of England base rate, for which they paid a £1,000 arrangement fee.
The couple’s local MP, Michael Foster, has twice written to the bank asking for an explanation but has had no response. He said: “All I’m really asking for is that the Addymans are given an explanation. There is no question that the cost of mortgages has risen since this mortgage was agreed.
“The bank are obviously not making any money out of it but they agreed it. If it does go to court, I would think it unlikely that it would order a repossession but there could be all sorts of possibilities.
Mrs Addyman told The Times: “Our only option is to sit this out and obtain legal advice. If the bank repossesses our home we would have to declare ourselves bankrupt.
“All we need is a simple explanation. We have not be told why this is happening. We have simply been ordered to find a new mortgage deal. It is disgusting that a state-owned bank can treat customers this way.”
Last month Jack Straw, the Justice Secretary, ordered an investigation into a High Court ruling allowing lenders to sell the home of borrowers who had missed just two mortgage repayments without the need for a court repossession order.
Under a law dating back to 1925, Mr Justice Briggs supporting the right of lenders to repossess properties at will.
A spokeswoman for NatWest said: “The decision to end any relationship with a customer in this way is made only in response to very limited and exceptional circumstances, and is specific to that individual customer. This is not a move that we take lightly.
Joined: 13 Sep 2006 Posts: 2555 Location: One breath from Glory
Posted: Sun Mar 15, 2009 11:42 pm Post subject:
Insurance 'job'-- possibly? Or up here they torch them to destroy forensic evidence.
Article says it was on a race track. Photo doesnt look much like a race track especially with trees that close? _________________ JO911B.
"for we wrestle not against flesh and blood but against principalities, against powers, against rulers of the darkness of this world, against wicked spirits in high places " Eph.6 v 12
Joined: 25 Jul 2005 Posts: 15846 Location: St. Pauls, Bristol, England
Posted: Tue Mar 17, 2009 5:51 pm Post subject: RBS & dodgy Ruby bring down Shropshire construction firm
Strange saga of ailing company and an elusive £11m ruby
It was an unusual transaction from the very outset: an ailing construction firm's balance sheet transformed though the injection of £11m in capital secured against the value of a huge ruby, the so-called Gem of Tanzania.
But less than a week after the Shropshire-based Wrekin Group went into administration with the loss of around 400 jobs, matters have become more curious still, with no one apparently certain where the gem is, or indeed able to recall having ever set eyes on it.
The mystery surfaced after Wrekin, a family-run concern for almost half a century until it was taken over in 2007 by a Derbyshire-based company, Tamar, finally ran out of money last Wednesday.
As anxious creditors pored over the last full accounts, filed at the end of 2007, they spotted something unusual. Unremarked at the time, Wrekin had turned a loss of £7.2m earlier that year into a surplus of almost £3m, a transformation explained under the column "additions to investments".
It read: "Other investments relate to the purchase of a ruby gemstone known as the Gem of Tanzania from the company's majority shareholder, Tamar Group Limited, for a fair value of £11m in exchange for the issue of 11m 2% cumulative redeemable preference shares ... the fair value of the ruby gemstone was determined by a professional valuer at the Istituto Gemmologico Italiano, based in Valenza, Italy, on 31 August 2007..........
Axeon Holdings are EU largest Li Battery group based in Dundee. Day after Mandy is on TV driving the electric car the creditors come in - put co into administration and sell it immediately to their preferred buyer cutting out shareholders (price was actually rising on AIM) for undisclosed sum
Smells like another Mafiya sting using the usury lever _________________ Belief is the Enemy of Truth
Joined: 25 Jul 2005 Posts: 15846 Location: St. Pauls, Bristol, England
Posted: Sun Dec 01, 2013 6:00 pm Post subject: RBS asset strip healthy firms & incubated LIBOR fraud
Bear in mind that RBS is also NatWest and Ulster Bank !
The “financial terrorism” of Royal Bank of Scotland
November 27th, 2013 (updated November 28th, 2013) (minor edits December 1st, 2013)
Another of the banking scandals I’ve been covering for more than three years is gaining a wider audience, following the publication of the Tomlinson Report on Monday and this morning’s confirmation from the Financial Times that the Serious Fraud Office is “considering” an investigation into the bank’s alleged theft of customers’ assets.
>Listen to Radio 5 Live’s Stephen Nolan interview me about this topic [the interview starts at one hour 7 minutes]
I first looked into the activities of RBS’s “recovery and restructuring” arm – global restructuring group and West Register – three years ago, publishing a blog that examined RBS’s despicable treatment of Scotland-based businessman Derek Carlyle in December 2010. I first looked at the allegations of “systemic institutionalised fraud” and systemic abuse inside GRG in June 2012. And in October 2012, I provided further details of alleged widespread wrongdoing inside RBS’s global restructuring group and West Register.
This included details of “manufactured defaults” which are when a bank trips a business borrower into breach of covenant through mechanisms including:-
(a) selling interest rate hedging products under false pretenses, and often under duress as a condition of continued funding support
(b) the removal of overdraft facilities at 48 hours notice
(c) arbitrary changes to the terms and conditions of loan agreements, including raising interest rates, adding charges and dramatically shortening loan maturities
(d) “losing” and then “recreating” lending agreements
(e) the placing of false valuations on the customers’ commercial property assets using ”tame” firms of chartered surveyors, which are alleged to include Graham & Sibbald in Edinburgh
Through such mechanisms banks, including RBS, are able to make out that business customers are “in breach” of loan-to-value agreements and/or covenants. In the case of RBS the evidence from several hundred case studies assembled by Tomlinson, and more thna 60 I am aware of myself, suggests a pattern of abuse which, while perhaps not systematic, is systemic.
Legally or otherwise, the alleged pattern of abuse permits the bank to transfer targeted business customers’ accounts to its “recovery and restructuring” unit GRG. While it is sometimes dressed up as a “hospital” or “intensive care unit” intended to help distressed corporate borrowers back onto their feet, it is nothing of the sort. Once a business is in GRG, it is saddled with additional fees and charges, often for wholly spurious reasons. The bank often imposes amateurish and unqualified “consultants” posing as advisers who charge £1000 a day plus, seemingly with a view to further destabilising the business customer.
Once a client firm has been “zombified” and milked for fees and its carcass is of no further use to the bank, it can be put into administration. There is not enough space to go into the iniquities that can arise from collusion between RBS and large accountancy firms including PWC, Ernst & Young and KPMG during administrations and receiverships, but suffice to say these parties have been known not to act in the interests of all the affected companies’ creditors.
Sometimes, they have been known to favour the sale of commercial property assets to RBS’s shady West Register property arm at prices well below those offered by rival bidders, including what might be considered to be the properties’ legitimate owners. Only about six per cent of corporate and commercial borrowers who enter GRG return to RBS’s performing portfolios (source: RBS annual report 2012)
Both GRG and West Register are profit centres for the bank, and are a bit like private equity funds albeit ones that obtain their assets at knockdown prices. It is at or after this stage in the process that RBS’s West Register arm seizes (or buys at crazily low valuations) the “distressed” customers’ commercial property assets. Like GRG, West Register was established by RBS’s former chief executive Sir George Mathewson in 1992 to try and profit from “distressed” situations in the wake of the 1990-1 recession.
Since I first spoke about RBS’s alleged maltreatment of business borrowers on BBC News (towards the end of the clip) and the Keiser Report in July 2012 I have been deluged with emails, phone calls, voice messages, and texts from SME directors and shareholders who complain that, for no legitimate business reason, RBS snuffed out their life’s work and seized their business assets using the methods described above.
I have had people literally crying down the phone about the despicable way in which the bank has treated them, with some in a suicidal state. And, as far as I am aware, most were running profitable, stable, creditworthy businesses, before the bank set out to destroy them — not so called “zombies”.
Victims of the abuse only really have three avenues to go down – sue RBS, complain to their MP or go to the media. However in all three of these routes the odds are stacked against them. Unless they have an MP like Jim Hood or Guto Bebb, complaining to their MP tends to get them nowhere. Speaking on Channel 4 News on Monday, Jesse Norman, MP for Hereford and Herefordshire South, admitted that all 650 of the country’s MPs share a dirty little secret – that their inboxes have for the past four years, been stuffed full with emails from constituents complaining that RBS has snuffed out their livelihoods and destroyed their businesses.
Complaining to the bank, Financial Ombudsman Service or the regulators is a complete waste of time. It will achieve absolutely nothing. It’s also worth noting that Business Secretary Vince Cable has been fully briefed on this scandal since May 2010 but has chosen to do little or nothing about it. He only appears to have taken any real action once the Tomlinson Report was published on Monday.
The putative SFO inquiry, mentioned on the front page of the FT today, (but which I also mentioned in the Sunday Herald on 3 November), which has only arisen thanks to the persistent efforts of businessman Neil Mitchell, former chief executive of Torex Retail, clearly offers a glimmer of hope to the tens of thousands of businesses effected by this scandal, and the majority of the UK population who believe that, if there are criminals inside RBS, they should be prosecuted and convicted for their crimes.
RBS’s decision to refer the matter to the ‘magic circle’ law firm Clifford Chance – which is already said to be acting for the bank in defending itself from claims that it stole customers’ commercial property assets and joined the bank’s panel of law firms alongside Freshfields, Linklaters, Simmons & Simmons, White & Case, Allen & Overy and Eversheds in July 2013 – is a risibly pathetic response to these very serious allegations. I am currently unable to think of an organisation more inclined to produce a whitewash than Clifford Chance.
I will be revealing more about this scandal, including further detail of the methods by which RBS has been plundering SMEs up and down the UK since May 2009 in my book Shredded: The Rise and Fall of the Royal Bank of Scotland, which is published by Birlinn in spring 2014. Not only is this sort of behaviour by RBS holding back the UK’s economic recovery, causing unemployment and reducing tax revenues, it is also creating much unwarranted misery including family breakdowns and even suicide among targeted firms. It is also completely destroying any trust which UK citizens may at one time have had in the banking sector.
For the record, the top people at GRG include Derek Sach, Richard Dorman, James Cresswell, Joss Brushfield, John Baini, David Whatham, Andy Thomson, Neil Graham and Laura Barlow, while the top people at West Register include Aubrey Adams, James Rowney, and the somewhat naive ex LGIM property expert Helen Gordon.
Update: Saturday, 30th November 2013
On Friday afternoon, the Financial Conduct Authority announced it is launching a Section 166 “Skilled Person’s Report” into allegations of wrongdoing in RBS, GRG and West Register. Clive Adamson, director of supervision at the FCA, said:
“These allegations, if proved, raise serious concerns about how banks’ treat their customers. An SME’s relationship with its bank is essential for any business to have a chance to succeed, and claims like the ones made threaten to undermine that. We expect all firms to act with integrity and put customers at the heart of their business.”
The bank responded by saying:
“We welcome the FCA’s inquiry. As of now, no evidence has been produced that backs the claims of systematic fraud made this week. These claims have done damage to RBS’s reputation and threaten to undermine our ability to build trust with customers and to increase lending to businesses in the UK economy. We need to get to the facts as quickly as possible. That’s why we fully support the FCA’s work and will carry on with our own investigation.”
These case studies come from the Sunday Times 24 November 2013
Our livelihood, our home, our marriage — all gone
WHEN Eddie Warren and his wife Cheryl took over the prestigious Bold hotel in Southport, their RBS manager was keen to boast to the local press how the bank’s loan had made the £3.7m purchase possible. But four years later the bank forced the Warrens’ business into administration by withdrawing the lending it had been so keen to provide. In the subsequent fire sale, the new owner became none other than the bank itself, when its property company West Register bought the hotel.
The bank snapped it up for the knockdown price of £1.4m, a year after independent valuers said the hotel was worth no less than £3.1m. Since the proceeds of the sale were insufficient to cover the Warrens’ £2.5m debt to the bank, they have lost everything. Last week Warren said he was bewildered as to how his hotel business, which had a healthy turnover, could have dropped by almost two-thirds in value when West Register took it into its extensive property empire.
“They stole it. Even if the property market was depressed it would be worth £3m,” he said.
The Warrens bought the hotel in 2007 using £1.2m of their money from the sale of their nursing home business. A condition of the loan was that they had to take out an interest rate swap because the bank said this would protect them when base rates rose. This was poor advice. They ended up paying a high fixed interest on their loans as base rates tumbled. Even worse, a peculiarity of some swaps is that the borrower pays penalties when interest rates fall. This added an extra £120,000 a year to their bill. Since it would have cost the Warrens £575,000 to buy out of the swap, the bank added this figure to the loan.
Its internal calculations now suggested the Warrens owed more than £3m at a time when property prices were falling. The Warrens never missed a loan payment, but the new calculations meant the bank could say they were in breach of their covenant because the value of the business was close to the amount borrowed. The business was put into the bank’s Global Restructuring Group, where it was hit with higher charges. In July 2011, the bank valued the hotel and slashed its worth to £1.8m even though an independent report had valued the business at £3.1m the previous year. The new lower valuation meant the business was worth far less than the loan. The business went into administration in autumn 2011 and was bought by West Register for £1.4m a couple of months later.
The hotel is still owned by West Register and the bank says it will at best break even when it is sold. Warren believes the hotel will soon be worth £4m again in a rising market — a substantial profit for the bank. He and his wife have lost £1.2m, their livelihood, their home and are now divorcing.
We have no duty to be fair, ruined businessman told
RBS forced an Edinburgh businessman to sell his home to his company before pushing it into administration and buying its assets in bulk at a fraction of their original value. Leonard Wilcox, 69, is fighting RBS in the courts over the loss of a prime residential site which was first valued at £5.35m but was later snapped up by the bank’s property division, West Register, for £1.1m.
He claims the bank misled him into taking a loan to buy four houses before pulling the plug on the deal and using the threat of bankruptcy to force him to sell his home. RBS is pursuing him for personal guarantees worth £467,000, arguing that it had no duty to “act fairly and in good faith” towards him because the relationship was “purely contractual”. Wilcox believes the bank deliberately “cherry-picked” his site for West Register. “I believe a decision was taken by the bank to take the site, and everything thereafter led up to that happening,” he said.
Wilcox’s firm, Bayfields Ltd, became embroiled with RBS in 2007 when he bought a bungalow in the exclusive Barnton Park Wood area and spotted a development opportunity. He planned to buy the four neighbouring houses and sell the whole site to a developer with plans to add 12 villas. RBS offered to lend Wilcox £2.5m to buy the houses after a valuation showed the complete site would be worth £5.35m with planning permission. He took the loan and signed personal guarantees in May 2008 after his bank manager emailed to say all the security requirements had been “covered off”.
Wilcox set about buying the properties but within months, the manager wrote a panicked email to say she had made a “grievous error” and the bank did not have enough security. The funds were withdrawn and Bayfields was moved into the feared Global Restructuring Group (GRG). A valuation in May 2009 after the property crash said the site would now be worth £3.5m with planning permission — less than its original value, but still more than the £2.5m loan. But GRG brought in a new surveyor who slashed the value to £1.2m.
The bank then demanded that Wilcox sell his bungalow to Bayfields so GRG had the entire site within its control. Wilcox tried to resist but was told he would face bankruptcy if he refused. The sale went through in 2010. The firm went into administration in August 2011. All five houses went into receivership and were sold to West Register. Wilcox and his wife were forced to leave their home. _________________ www.lawyerscommitteefor9-11inquiry.org www.rethink911.org www.patriotsquestion911.com www.actorsandartistsfor911truth.org www.mediafor911truth.org www.pilotsfor911truth.org www.mp911truth.org www.ae911truth.org www.rl911truth.org www.stj911.org www.v911t.org www.thisweek.org.uk www.abolishwar.org.uk www.elementary.org.uk www.radio4all.net/index.php/contributor/2149 http://utangente.free.fr/2003/media2003.pdf
"The maintenance of secrets acts like a psychic poison which alienates the possessor from the community" Carl Jung
Last edited by TonyGosling on Wed Dec 04, 2013 8:56 pm; edited 1 time in total
Business Secretary Vince Cable has told the BBC that the evidence against RBS, compiled by government adviser Lawrence Tomlinson, looked "solid".
Mr Tomlinson's report claims that the bank put some "good and viable" businesses into default so it could make more profit.
Joined: 25 Jul 2005 Posts: 15846 Location: St. Pauls, Bristol, England
Posted: Sun Dec 01, 2013 6:06 pm Post subject:
The KEY question is PROFIT CENTRE OR PUBLIC SERVICE? BBC News Lawrence Tomlinson speaks of RBS forced foreclosures, shades of CBA/Bankwest
CBA/Bankwest have been called the allegations that they profited from forcibly inducing defaults in productive customers as "conspiracy theories". Now RBS have been caught doing the same thing.
£1 trillion timebombs RBS must defuse
By Ian Fraser
Published: Sunday Herald
Date: 3 November 2013
It will not be broken up … but the future is far from plain sailing. By Ian Fraser
Ross McEwan: new RBS boss says bank's recovery vital for UK economy - videoRoss McEwan had a baptism of fire on Friday when he made his first set-piece announcement as chief executive of Royal Bank of Scotland. There were a few shreds of good news, including that the Treasury has decided against breaking up RBS into a “bad bank” and a “good bank”, and the fact that RBS had managed to lift its core tier-1 capital ratio – a measure of financial strength – to 11.6% from 9.1%. Rather than breaking up RBS, the Treasury decided the Edinburgh-based institution in which it owns an 81% stake is to create an “internal bad bank” – essentially a re-brand of its existing “non-core” division – to house £38 billion of toxic loans, and that these have been earmarked for accelerated run-off over the next two years.
Much of the rest of Friday’s announcement was negative. McEwan – who ran RBS’s retail banking arm for a year before becoming its chief executive – said the new internal bad bank meant RBS would have to take some £4.5bn in impairment charges in the fourth quarter of 2013, implying a full-year loss. He also said that RBS had made a loss of £634 million in the third quarter. And an independent review into the bank’s small business lending led by Sir Andrew Large confirmed what was widely suspected: that the bank’s approach to small business lending is dysfunctional, and that it must do better. What was not so obvious from Friday’s string of announcements, however, was that a number of enormous landmines continue to lurk just under the surface of the bank’s Fred Goodwin-ordered blue-and-amber carpets. Here is a selection of these unexploded bombs – the litigation risks and legacy issues that McEwan still needs to try and defuse.
UK: PPI mis-selling - Estimated liability: £2.65 billion
RBS has set aside £2.65 billion in provisions to cover the cost of compensating customers to whom it mis-sold payment protection insurance (PPI). This often redundant product was highly lucrative for the banks but was useless to many of the people who bought it. The bank now has 1,800 staff working full-time on PPI redress. It threw an additional £250 million into the compensation pot on Friday.
UK: Rights issue class action - Liability: up to £13 billion
The bank is fighting the UK’s largest ever class action case in the High Court. The suit comes from 13,000 RBS investors who allege that the bank duped them into putting £12.3 billion into a rights issue in April 2008. On 30 July, the RBoS Shareholders Action Group was ordered to amalgamate its £4.3 billion claim with those of two other investor groups. A QC’s opinion last year found that asset-management firms that bought into the rights issues that fail to participate in the action could risk being sued by investors. The bank said: “RBS considers its has substantial and credible legal and factual defences to these claims.”
UK: Card and identity protection insurance - Estimated liability: £200 million (based on RBS’s market share)
The bank misled customers into buying insurance for their credit cards and identity theft insurance from London-based Card Protection Plan. On 22 August, the FCA declared that CPP and RBS, alongside 12 other banks and credit card issuers, had agreed to a £1.3 billion compensation scheme.
UK and Ireland: IT meltdown - Estimated liability: up to £300 million
On 19 June 2012, RBS suffered one of the worst IT meltdowns in banking history, with millions of customers locked out of their accounts for days and customer transactions going awry. The bank has promised to reimburse customers for any losses they suffered and paid out £175 million in 2012. The incident is also the subject of regulatory inquiries in both the UK and Ireland, and RBS may also face claims for damages through the courts.
UK: “Systemic abuse” in restructuring and recovery - Estimated liability: up to £5 billion
Allegations of “systemic institutionalised fraud” in RBS’s recovery and restructuring division (West Register and Global Restructuring Group) are being investigated by a number of civil and criminal UK authorities. Lawrence Tomlinson, chairman of Leeds-based LNT Group and entrepreneur-in-residence at the Department for Business Innovation and Skills, alleges: “This is a massive scandal. It’s about the bank creating situations that put people into a corner where it can hit them with outrageous fees and transformed into zombie companies.” He is providing 300-400 case studies to business secretary Vince Cable.
UK: Interest rate swaps mis-selling - Liability: up to £1.5 billion (if FCA fines RBS)
In February, RBS booked a £750 million provision to cover compensation for small businesses to which it mis-sold interest-rated hedging products, a figure that experts believe may be too low. After initially denying it had done anything wrong, the bank now says it will provide “fair and reasonable redress” to eligible customers under a redress scheme agreed with the FCA. Speaking on the BBC’s Panorama last month, FCA chief executive Martin Wheatley warned the regulator may also fine banks involved in the scandal.
EU: Credit default swaps anti-competitive behaviour - Estimated liability: unknown
EU cartel-busters are investigating RBS’s role in the credit default swap (CDS) market and handed the bank a statement of objections in July. The EC has raised concerns that a number of banks, plus data provider Markit and industry group the International Swaps and Derivatives Association may have jointly blocked exchanges from entering the CDS market. RBS said: “At this stage, the RBS group cannot estimate reliably what effect the outcome of the investigation may have on the group, which may be material.”
Singapore: Benchmark rigging - Estimated liability: £500 million-£600 million
RBS was one of 20 banks penalised by the Monetary Authority of Singapore in June for rigging Sibor (the Singapore Interbank Offered Rate) and other benchmarks between 2007 and 2011. RBS has set aside additional statutory reserves with MAS of Singapore $1 billion-$1.2bn (£500 million-£600m) and has been forced to improve its systems and controls in Singapore.
US: SEC “Wells” notice for defective residential mortgage-backed securities - Estimated liability: unknown
The US Securities and Exchange Commission slapped a “Wells” notice on RBS on 28 March, giving notice of its intention to sue. The suit relates to allegedly faulty mortgage-backed securities dating from 2007. The SEC started its probe in September 2010, when it asked RBS for information concerning residential mortgage-backed securities underwritten by US subsidiaries of RBS in the period September 2006 to July 2007.
US: Defective mortgage bond issuance - Estimated liability: $4 billion-$6 billion
RBS, through Greenwich Capital, sold $32 billion of allegedly defective mortgage-backed securities to American state-owned mortgage giants Fannie Mae and Freddie Mac. Now the Federal Housing Finance Agency (FHFA) is suing RBS over these the bonds. The FHFA alleges that RBS routinely breached mortgage-lending rules and bullied surveyors into inflating property valuations. Overall, RBS is being sued for $91bn of mortgage-backed securities and has been named as defendant in 45 lawsuits related to mortgage-backed securities.
US: Weak anti-money-laundering controls - Estimated liability: up to $1.5 billion
On 27 July 2011, RBS was hit with a cease-and-desist order by the US Federal Reserve over violations of money-laundering laws. This required RBS to improve risk management and compliance to ensure does not get used as “washing machine” for the laundering of funds for countries subject to US economic blockade, such as Iran. RBS is “continuing to co-operate” with inquiries led by the Department of Justice and has “conducted disciplinary proceedings against a number of employees”.
US: Mortgages – loan repurchases and indemnities - Estimated liabilities: $750 million
When bundling mortgages into mortgage-backed securities, the bank’s M&IB arm (formerly GBM) and Citizens asked issuers of the underlying mortgages to provide certain warranties. In instances where issuers refused, M&IB tended to issue the “representations and warranties” itself. In such cases, the bank is liable to repurchase the bonds or else “indemnify certain parties against losses”. Between early 2009 and June 2013, RBS received $741 million in repurchase demands, which it is striving to resist. The bank said: “The volume of repurchase demands is increasing and is expected to continue to increase.”
US: Credit default swaps anti-competitive behaviour - Estimated liability: unknown
In May and August 2013, RBS and other banks were sued in anti-trust class action suits filed in courts in Illinois and New York state. The complaints allege that RBS broke competition law in the market for credit default swaps, driving up bid-offer spreads. The bank admits the cases could lead to “investigatory or other action being taken by governmental and regulatory authorities” and could have a “material adverse effect” on RBS group.
US: Other allegedly faulty securitisations - Estimated liability: unknown
In January 2011, the SEC launched a formal inquiry into inadequate documentation relating to RBS’s US mortgage securitisations. This followed subpoenas in 2007 of several players in the US securitisation industry, focusing on information underwriters obtained from independent firms that performed due diligence on underlying loans. RBS gave relevant documentation to the New York attorney general in 2008. RBS said: “The investigation is ongoing and the RBS Group continues to provide the requested information.”
Global: Libor - Estimated liability: RBS already fined £390 million; the ultimate cost could be as high as £80 billion
On 6 February, the US Department of Justice and the Commodity Futures Trading Commission (CFTC) and the UK’s Financial Services Authority fined RBS $612m (£390m) fine for rigging Libor, the benchmark interbank interest rate. Other banks and brokers penalised for similar offences include Barclays, UBS and Rabobank. RBS faces further penalties from the EU and Canadian Competition Bureau, plus civil claims from US investors, the most recent of which came from mortgage giant Fannie Mae last Thursday. Analyst Sandy Chen has said if there was just 0.05% mispricing in interbank rates over four years – less than the 0.4% some class action lawsuits allege – RBS faces possible damages of £80bn.
Global: ISDAfix - Estimated liability: unknown
Multiple agencies and regulators around the world are investigating RBS for possible rigging of IDSAfix, a benchmark used in the interest rate swaps market. America’s CFTC is examining about one million emails and phone call recordings related to the alleged manipulation, involving traders from RBS and more than ten other global banks and brokerages.
Global: FX market rigging - Estimated liability: unknown
On Thursday it emerged that two of RBS’s currency traders have been suspended as part of an inquiry by global regulators into suspected manipulation of foreign exchange markets. The regulators, which include the UK Financial Conduct Authority, America’s FBI and Switzerland’s FINMA suspect that global banks including RBS colluded to manipulate exchange rates in the global, $5.3 trillion a day, foreign exchange markets. RBS has provided the FCA with e-chats that a former senior RBS dealer – Richard “Dick” Usher who left the bank in 2010 – had with traders at other banks. The traders’ group was variously known as “The Bandits” and “The Cartel”. _________________ www.lawyerscommitteefor9-11inquiry.org www.rethink911.org www.patriotsquestion911.com www.actorsandartistsfor911truth.org www.mediafor911truth.org www.pilotsfor911truth.org www.mp911truth.org www.ae911truth.org www.rl911truth.org www.stj911.org www.v911t.org www.thisweek.org.uk www.abolishwar.org.uk www.elementary.org.uk www.radio4all.net/index.php/contributor/2149 http://utangente.free.fr/2003/media2003.pdf
"The maintenance of secrets acts like a psychic poison which alienates the possessor from the community" Carl Jung
The recording below gives a fair impression of the bullying methods which have been deployed by RBS and its “restructuring and recovery” division, Global Restructuring Group, since 2009 in order to extort money and impose crippling additional costs on its business customers in the UK. The critical point here is the main reason that Trihealth is struggling is because RBS missold the Lancashire-based chemists’ chain two interest rate swaps, which drained £1.2m out of the business. But the menacing GRG managers who you hear on the recording consistently refuse to acknowledge the significance of this. The Mail on Sunday has a good article on this.
The commentary comes from Harry Wilson, banking editor of the Daily Telegraph. Published in the Telegraph on 25 November 2013
St Helens-based pharmacy operator Trihealth is not quite dead, but its co-founder and director Mark Addison is close to throwing in the towel in after fighting Royal Bank of Scotland for three years to keep the business alive.
Put under the control of RBS’s global restructuring group (GRG) in October 2010 after breaching an RBS overdraft limit, Mr Addison says he has reached the end of his tether.
“We had been hovering around our overdraft for some time when they finally put us into GRG, but what has followed has been appalling,” he says.
Trihealth’s story is a familiar tale of a business that prospered in the years of plentiful credit only to come unstuck five years ago. However, Mr Addison’s feelings go beyond mere bitterness; he claims the bank actively contributed to the collapse of the business.
“Turnover has dropped 70% since we were put under GRG as they have starved the business of cash,” he claims.
Once the company was deemed to be in distress it proved diffficult and expensive to secure more funding; on a recent conference call, Mr Addison was told by a member of RBS’s local GRG team that they would only consider offering a further lending facility, if presented with an independent report on the business’ future funding. But it would have to be carried out by an approved accountancy firm at his expense.
In its three years under GRG, the company claims to have paid £130,000 in fees to GRG, including a £1,000 monthly charge, £70,000 in invoice financing, £50,000 for an outside turnaround adviser, £12,000 in valuation fees and £40,000 in additional interest payments. It has an outstanding interest rate hedging product that has so far cost about £700,000.
…With government support and encouragement, Stephen Hester undertook to cut back any risky exposure on the bank’s balance sheet with little consideration for the niceties of business etiquette.
RBS UK Uncut Here to fleece you _________________ www.lawyerscommitteefor9-11inquiry.org www.rethink911.org www.patriotsquestion911.com www.actorsandartistsfor911truth.org www.mediafor911truth.org www.pilotsfor911truth.org www.mp911truth.org www.ae911truth.org www.rl911truth.org www.stj911.org www.v911t.org www.thisweek.org.uk www.abolishwar.org.uk www.elementary.org.uk www.radio4all.net/index.php/contributor/2149 http://utangente.free.fr/2003/media2003.pdf
"The maintenance of secrets acts like a psychic poison which alienates the possessor from the community" Carl Jung
The state-owned Royal Bank of Scotland Plc has signed an agreement with the City of London Police to help them with free training and advice on financial crime.
When I first read this story, I had to make sure that it wasn't being reported in one of the satirical spoof websites that one can find on the net.
When I read the same story in the Financial Times, I had to accept that it was probably true, hence the title of this blog!
Let me state straight away that I am wholly opposed to this move. I think it is far too generous to the Royal Bank of Scotland, and frankly, paints the City of London Police in a ridiculous light. If the City Police need to get free advice from RBS on financial crime, then things have truly sunk to a level from which there will be no good outcomes in the foreseeable future, and the City Police should be ashamed of themselves for even contemplating such a move.
Let me set out my objections to this proposal.
The Royal Bank of Scotland has, by its actions in the past, demonstrated more clearly than mere words can express, its utterly criminogenic profile and the organised criminal mentality of many of its controllers and staff. Whether it was through defrauding its customers through the wholesale rip-offs masquerading as PPI provision; through early foreclosing on valuable and profitable real estate projects and then benefiting from the asset values themselves; whether through Libor rigging or forex manipulation, it has been an organisation that is criminologically completely indistinguishable from an organised crime family, a mafia group. A definition of Organised Crime, taken at random from the UK Home Office and the National Criminal Intelligence Service makes the point.
Great Britain: Home Office/NCIS (early 1990s)
"...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..."
Well, when we examine the track record of RBS in light of this definition we find that it has many outstanding litigation issues. In its 2014 interim results, the bank published a long list that stretched to 17 pages, including suspected manipulation of foreign exchange markets and alleged mis-selling of US mortgage securities.
Some of these cases do date back to the financial crisis, such as the alleged mis-selling of US mortgage securities. Many, however, concern more recent activity, such as the investigations by at least 15 regulators and prosecutors around the world into collusion and market-rigging in the $5.3 trillion a day foreign exchange market. Almost three dozen staff have been suspended, placed on leave or fired by 10 banks, which launched internal probes into forex market rigging only last year. Not exactly a legacy issue.
In addition, the bank has become the latest bank to take a pre-emptive hit to cover the cost of an investigation into suspected manipulation of the foreign exchange market, making a £400m provision.
But on top of the forex provision, the bank also booked an additional £100m provision, on top of the £2.2 billion it has already repaid to compensate customers for mis-selling payment protection insurance.
Therefore, is it, I ask, a proper thing for the City of London Police to be organising such a close relationship with an institution which is facing so many wide-ranging investigations on a world-wide basis, many of which possess significant criminal characteristics?
The Huffington Post reports that the City force, which is national policing lead for fraud, handles some of the UK's most high profile economic crimes, The City Police said that while its officers were already highly-trained specialists, it could benefit from banks "in areas such as equities and markets, financial instruments, international jurisdictions, cyber technology and foreign languages".
But the RBS staff will not be involved in any operational police activity or be asked to advise on information relating to specific investigations.
Commissioner Adrian Leppard said he hoped it would be the first of many such agreements with the financial sector.
"...We can now tap into their massive knowledge base of financial products and digital technology and use their foreign language skills, which reflects the increasingly international dimension of economic crime investigation..."
Emma Smith, head of security, resilience and control at RBS, said: "I am delighted to have signed this agreement and look forward to working closely with the City of London Police in their fight against financial crime..."
As far as I can ascertain, in her 8 years reported service at RBS on LinkedIn, Ms Smith has not disclosed investigating any major financial crimes, and we are not told whether her experiences in audit and security will have helped her understand how her employing institution managed to make so much illicit profit from PPI fraud! She is reported as saying;
"...The experience and expertise of our employees will help safeguard our customers and others..."
Hmmmmm, clearly not how things used to work in the past when RBS was busily defrauding its clients of millions of pounds worth of spurious PPI cover.
And what does RBS get in return?
Well forgive my cynicism, but I cannot help but wonder if the price of this new-found love-in between the City Police and one of our major banking crime families will be cemented by greater police support for the tidal wave of cybercrime which is flooding the banking community and creating significant crime problems for banking clients.
At a City dinner, a senior UK banker complained to me that he was infuriated that the Police would or could do little to help him with his cybercrime problems. When I pointed out to him, not unreasonably, that the Police are not merely there as a free adjunct for his bank's crime prevention strategies, he became spiteful.
"...And that's why I don't bother to spend any time analysing STR's (Suspicious Transaction Reports). I tell my staff, "...send down the first ten alerts out of the box and ignore the rest. If they can't help me, then I am damned if I am going to help them..."
Nice man, but typical of his class and breed!
There was a time (nearly 30 years ago now) when we in the Metropolitan Police Fraud Squad undertook all our own enquiries into major financial crimes. We dealt successfully with crimes in the securities markets, the derivatives and futures markets, the options exchanges, and the new traded OTC markets in alternative securities. What has happened to that expertise over the years, how has it been lost along the road?
My Commander sent me to America to study with the Securities Exchange Commission and the Commodity Futures Trading Commission as well as studying at all the major futures and securities exchanges in Chicago, Philadelphia and New York.
From our colleagues in arms in the United States I learnt about the emerging problems and crime types we would be called upon to handle and came home wiser and better advised as to how to confront these crimes. It was all written up and the reports lie, as far as I know, today in the Commissioner's library.
We certainly didn't go scuttling round doing deals with the very people we wanted to be arresting, we did it ourselves and provided our own levels of training and expertise. We had a fraud course then which lasted ten weeks at Hendon. It doesn't exist any longer. We had our own access to foreign language experts if we needed translation services, we didn't ask the employees of our biggest suspects to translate the documents for us.
We were not about to give financial institutions, many of whose employees deserved to be in prison, the benefit of an accepted public relationship with us.
My real objections to this kind of cosy deal are that by being seen to tie in to a partnership with the City Police, RBS will be able to operate under a false flag of honesty and incorruptibility. They will use the existence of the partnership to promote themselves as creatures of truth and integrity. They will say, when the next financial scandal emerges in which their dodgy dealers are found to have their grubby fingers rootling around in the bottom of the pie; 'Well we had no idea that such was the case, and the police would not have partnered with us if they had suspected that this kind of thing was going on..."
It is far too early yet for RBS to be allowed to emerge into the sunlight, free from the whiff of crime and graft that attaches to them. Let us not forget, they and their appalling former management team succeeded in turning one of the world's largest banking empires into one of the world's biggest potential bankruptcies within a few short years.
They, along with other dishonest banks predicated the banking crisis. They have cost the unwilling British tax-payer a minimum of £45 billion to just keep them afloat, and we have yet to see a penny of that money returned, and it is unlikely we ever will! Not one of their egregious management has been forced to pay any kind of meaningful penalty for their reckless conduct, (I don't include the removal of dubiously-earned knighthoods), and now they sit on their Caledonian estates, enjoying their copper-bottomed pensions, and no doubt slaughtering the furred and feathered denizens of the glens, much in the same way presumably as they savaged the interests of their customers.
Their present directors demand bonuses and payment schemes far beyond the dreams of avarice, and while the rest of the country is forced to submit to austerity-driven pay freezes and state service cut backs, the suits of Throgmorton Street and Princes Street are queuing up for another pair of handmade shoes or silk shirt.
No, RBS has in no way paid sufficiently yet for her crimes and misdemeanours, and now is not the time for the British public to be condoning her 'get out of jail card' by paying lip-service to the suitability of this grubby deal with the City Police.
It is all very well for the fat, overpaid bankers in the City of London to believe that they can ride roughshod over every shred of public sensitivity for their past criminal antics, and be allowed to continue to add to the inexhaustible pile of public privileges and rewards that go with the trade of banker! I know they want to put the past behind them and to get on with the next round of money making as if nothing had ever happened, but the only way in which we, the undefended and the proto-victims of their greed and dishonesty can protect ourselves in the future, is to keep reminding ourselves and them that we have not forgotten their rotten conduct and their dishonest behaviour, and until such time as it can be properly felt that they have, finally paid sufficient penance, for their wrongdoing, then any deals which portray them in a privileged light should be denied to them.
'George Osborne is rushing through a fire sale of RBS at a massive £13bn loss to taxpayers.
You read that right. Just as he's pushing through £12bn of welfare cuts which will hit the poorest and most vulnerable in society, Osborne wants to sell the taxpayer-owned bank back to his friends in the City at knockdown prices, losing taxpayers at least an eye-watering £13bn.
We're already paying for the banking crisis that we didn't cause, and Osborne wants to return RBS on the cheap to the people who caused the crisis in the first place.
Just a few months ago, George Osborne was insisting we'd get our money -- the £45.2bn spent to save RBS from collapse -- back from any sale of the bank. Now, after the election, he thinks he can get away with selling it at a massive loss by rushing through the sale before we have time to stop him.
Let's prove Osborne wrong.
Tell George Osborne not to sell off RBS at a knockdown price. Osborne needs to review all of the options on the table and find out what's best for taxpayers and the economy.
The cosy relationship between government and the financial sector is right at the heart of the corporate capture of our democracy. The banks caused the financial crisis, and society has since been paying for their reckless behaviour.
But the banks haven't learned. After paying out £6.2bn in fines for misconduct, they're now busy lobbying to water down regulations designed to protect us from the next crisis. And RBS, which was bailed out as a result of its reckless pursuit of ever riskier profit, is especially ruthless. Even a government report has called it a "vampire bank", bleeding its customers dry.
We own 79% of RBS. Rather than selling off our stake at a loss to people who want to carry on with business as usual, the government should be finding ways to make the bank work for the good of the nation -- using it to invest in fixing our broken banking system.
SumOfUs has fought to rein in the power of corporate banks and keep them accountable. Recently, over 60,000 UK SumOfUs members signed on to call out HSBC for helping Britain's richest evade tax on an unprecedented scale. We're also pursuing a groundbreaking case to prosecute HSBC for its tax evasion, and for this, we made front page news in the UK.
We've been campaigning hard on big banks because our banking system is broken. Stopping a rushed sale of RBS is a one-time opportunity to fix it, and we can't let George Osborne throw it away.
Osborne: don't rush through a sale of RBS. We demand you properly assess what is best for the economy and the British public before deciding its future.
Britain may sell RBS shares at loss this year -sources, Reuters, 10 May 2015
Reforming RBS: local banking for the public good, New Economics Foundation, 25 February 2015
Tory 'fire sale' of Lloyds & RBS shares not in best interests of banks or taxpayers, warns Unite, Unite, 11 May 2015
Why the UK has the least resilient financial system in the G7, New Economics Foundation, 2 June 2015
Calculating the loss: Counting the true cost of an RBS fire sale, New Economics Foundation, June 2015
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