Daily Archives: February 15, 2015

HSBC says sorry over past standards at Swiss bank

Sorry doesn’t cut it. Someone needs to go to jail…

HSBC apologised to customers and investors on Sunday for past practices at its Swiss private bank after allegations that it helped hundreds of clients to dodge taxes.

Europe’s largest bank said in full-page advertisements in British newspapers that recent media coverage that focused on the Swiss operation and financial affairs of some of its clients had been a painful experience and that standards in place today “were not universally in place” in the past.

“We therefore offer our sincerest apologies,” the advertisement said. It is addressed to customers, shareholders and colleagues and is signed by Chief Executive Stuart Gulliver.

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Bank Hackers Steal Millions via Malware

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PALO ALTO, Calif. — In late 2013, an A.T.M. in Kiev started dispensing cash at seemingly random times of day. No one had put in a card or touched a button. Cameras showed that the piles of money had been swept up by customers who appeared lucky to be there at the right moment.

But when a Russian cybersecurity firm, Kaspersky Lab, was called to Ukraine to investigate, it discovered that the errant machine was the least of the bank’s problems.

The bank’s internal computers, used by employees who process daily transfers and conduct bookkeeping, had been penetrated by malware that allowed cybercriminals to record their every move. The malicious software lurked for months, sending back video feeds and images that told a criminal group — including Russians, Chinese and Europeans — how the bank conducted its daily routines, according to the investigators.

Then the group impersonated bank officers, not only turning on various cash machines, but also transferring millions of dollars from banks in Russia, Japan, Switzerland, the United States and the Netherlands into dummy accounts set up in other countries.

In a report to be published on Monday, and provided in advance to The New York Times, Kaspersky Lab says that the scope of this attack on more than 100 banks and other financial institutions in 30 nations could make it one of the largest bank thefts ever — and one conducted without the usual signs of robbery.

The Moscow-based firm says that because of nondisclosure agreements with the banks that were hit, it cannot name them. Officials at the White House and the F.B.I. have been briefed on the findings, but say that it will take time to confirm them and assess the losses.

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Meet the serial failures in charge of protecting America’s online privacy

HEDGE FUNDS EXIT HOUSING SECURITIES AS PRICES RISE

(Bloomberg) — Hedge funds that profited on residential mortgage debt after the financial crisis such as Pine RiverCapital Management and Canyon Partners are trimming their bets as prices rise.

Gorelick Brothers Capital is also exiting investments in both uninsured and government-backed home loan securities. The firm is seeking higher returns by raising a private equity fund to buy single-family rental houses, said Rael Gorelick, a co-founder of the firm.

Hedge funds that took a risk on distressed mortgage debt after the 2008 housing crash have had robust returns. Canyon Partners made $7 billion on non-agency securities in the decade before and after the financial crisis. Now these firms see dwindling opportunities as investors crowd into the market and issuance declines, pushing upprices of the non-agency debt.

“Spreads got tighter over the past few years,” said Colin Teichholtz, co-head of fixed income trading at Minnesota-based Pine River, which manages $15.5 billion. “It has gone from a great opportunity to a mediocre one.”

Returns at hedge funds that buy asset-backed securities, often including mortgage debt, averaged 10.2 percent last year, down from 13 percent in 2013, according to data compiled by Bloomberg.

Pine River cut its exposure to non-agency mortgage-backed securities, including subprime, from more than 40 percent in 2011 to below 10 percent today, Teichholtz said. The firm bought the debt at depressed prices after housing prices plummeted, and again in 2011 and 2012 when banks came under regulatory pressure to reduce their holdings.

Rest here…

Brazil probes link between HSBC Swiss accounts, Petrobras scandal: sources

Brazil’s tax watchdog opened a probe on whether about a dozen people involved in the Petrobras corruption scandal also allegedly had undeclared accounts with HSBC Holdings Plc’s private bank in Switzerland, two sources with knowledge of the situation said on Saturday.

A former manager at the state-controlled oil giant Petróleo Brasileiro SA had an account at HSBC’s private Swiss bank, said the first source, who requested anonymity since the probe has not been made public. Others include an illegal money changer and two executives from engineering and oil equipment firms that had contracts with the firm, which is known as Petrobras, the same source added.

The sources did not name the people being probed.

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U.S. whistleblower summoned to testify in UBS case in France

A former UBS AG (>> UBS AG) banker who helped U.S. authorities prosecute the Swiss bank in a tax fraud case has asked for permission to travel to France to comply with a subpoena in another investigation of the company, according a court document.

Bradley Birkenfeld, who received more than $100 million for being a whistleblower but also served 30 months in prison in the U.S. case, has been subpoenaed to take part in the French case later this month, according to a motion his lawyer filed in the U.S. District Court of Southern Florida.

Birkenfeld, who pleaded guilty in 2008 to conspiring to defraud the United States, remains on supervised release from prison. He must have court permission to go to Paris to appear before a judge on Feb. 27 in the French UBS investigation.

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Former HSBC chairman steps down from City lobby group after leaks

Peace out, Stephen!

A former boss of HSBC, Stephen Green, has stepped down from his position with a financial services lobby group after allegations that the bank helped people dodge taxes.

Green, who is under increasing pressure over the HSBC revelations, quit as chairman of TheCityUK’s advisory council, an unpaid position, the organisation said on Saturday.

“This is entirely his own decision,” Gerry Grimstone, chairman of the TheCityUK’s board, said, describing Green as a man of great personal integrity.

“He doesn’t want to damage the effectiveness of TheCityUK in promoting good governance and doing the right thing so has decided to step aside from chairing our Advisory Council.”

Lawmakers in Britain’s parliament are considering whether to quiz Green over the allegations and the Bank of England has said it might look into the case too.

Green was HSBC chairman from 2006 until 2010. He has so far declined to comment on the allegations.

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