Outrage as city fatcat that stole £1.4million escapes prosecution

 

http://www.mirror.co.uk/news/top-stories/2...15875-23731769/

 

Vast payouts are clearly not the only bonus you get being a fatcat banker – you also apparently get away with fraud scot-free.

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A City firm was yesterday accused of protecting a financier who stole £1.4million so he would not go to jail.

 

Ravi Sinha, 47, was fined nearly £3million by the City watchdog for fraud but escaped criminal prosecution after his company JC Flowers allegedly refused to help police nail him.

 

In a shocking contrast exposing the double standards protecting the rich, a shop worker who allowed friends to steal £10,000 worth of goods – a fraction of what the banker took – was last year jailed for nine months.

 

City of London Police and JC Flowers yesterday blamed each other for the scandal – both accusing the other of having no appetite for prosecution.

 

The extraordinary decision not to put Sinha before the courts was last night branded a disgrace.

 

Sara George, a partner at law firm Stephenson Harwood, said: “The public will have difficulty understanding why a checkout girl who steals £10,000 from her employer should go to prison but a phenomenally wealthy individual who misappropriates millions should not.”

Labour MP Teresa Pearce added: “This is another example of the banks thinking they operate in what they believe is their own moral code which is different from the one everybody else has to live by.

 

“It’s inexcusable, it’s a good job he didn’t steal this money during a riot; he’d be in prison for the rest of his life.”

 

Sinha earned £886,000 a year, with potential bonuses of £1.3million, before he was busted for taking £1.4million by claiming bogus advisory fees after losing a fortune on private investments.

 

He ran the European arm of US private equity firm JC Flowers from 2005 to 2009, when he was sacked after the firm discovered his scam.

 

JC Flowers called in the Financial Services Authority to investigate.

 

And the regulator banned Sinha from working in the industry for life, fining him one of the biggest penalties in its history for “very serious” dishonesty.

 

But when it passed its file to police a criminal prosecution did not follow.

 

Under the Fraud Act, if convicted in court, Sinha would face between four and seven years’ prison.

 

A police source said officers were very keen to prosecute him but dropped the case after his bosses refused to co-operate fully – making the chance of a prosecution difficult.

 

A police spokesman said: “Having considered the matter, it was decided it would not be appropriate to take it any further.”

 

But a police source said: “We spoke to JC Flowers and there was no appetite from them to support an investigation.

 

“In a case of this nature without the full support of the victim company a successful conviction is highly unlikely.

 

“So with that in mind, to put a lot of resources into it and spend a lot of taxpayers’ money on a case where we had little chance of a result, we decided not to take it further.

 

“Without their support it would be very difficult in court.”

 

However, a source close to JC Flowers dismissed the police claims and said the firm would co-operate if a prosecution is launched.

 

He said: “If the police prosecute the company would happily assist, that’s always been the case.”

 

Eddie Weatherill, chairman of the Independent Banking Advisory group, was amazed Sinha was not being put before the courts.

 

He said: “For some reason we often find there’s a real lack of determination to criminally prosecute bankers who have done wrong.”

 

David Fleming, Unite national officer, added: “It’s an utter disgrace for this wealthy banker to be walking away scot-free and avoiding any criminal investigation.

 

“Frontline workers in bank branches are constantly penalised and challenged on their conduct under the harshest of conditions.

 

“Why is it one rule for the rich bankers and another for ordinary staff?”

 

Born in Patna, India, but raised in Walsall, West Midlands, Sinha studied philosophy, politics and economics at Oxford and did an MBA at Columbia University before embarking on a glittering career in the City.

 

The father-of-five, who lists his hobbies as the opera and reading, worked at Goldman Sachs and Morgan Stanley before joining JC Flowers in 2003. During the financial crisis, Sinha led the JC Flowers team which tried to buy Northern Rock but the firm’s funds were themselves caught up in the meltdown and the bid was abandoned.

 

Sinha ran into financial problems when the credit crunch hit, the FSA said. It added: “Sinha’s personal investments were also under pressure.

 

“As their value declined and the income he received from them dried up, he had difficulty servicing his loans and meeting his financial obligations.”

 

He had borrowed £7.47million to fund personal investments but when he struggled to meet the repayments he launched his scam. He was busted by JC Flowers in October 2009. Tracey McDermott, of the FSA, said: “Sinha exploited his position of trust as CEO to fraudulently obtain significant sums for his personal benefit.

 

“He engaged in a dishonest, deliberate and sustained course of misconduct which lasted for several months. Such behaviour has no place in the financial services industry.”

 

Sinha was bankrupted after being fired by JC Flowers, but was discharged last year.

 

His financial penalty consists of paying back the stolen money and a fine. Sinha told the FSA the fine would cause him serious financial hardship and push him back into bankruptcy.

 

But he still lives in a lavish townhouse in one of London’s most expensive streets in Chelsea.

 

Sinha said: “I very much regret misleading JC Flowers over this issue and continue to offer my sincerest apologies to all those concerned.

 

“It was a foolish action which I completely regret. I will bear the consequences of my actions long into the future.”

 

JC Flowers stressed it had found the problem itself and the FSA had not criticised its systems or controls.

 

A spokesman said: “Neither the company that paid the invoices nor investors in the funds advised by JC Flowers have suffered any loss as a result of Mr Sinha’s actions,”

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This really does take the biscuit..... One really does have to wonder just who the hell the law is actually working for in this country. When you look at the way in which the rioters were dealt with, and people being sent to prison even for setting up Facebook pages and not even taking part in any of the rioting; and then you look at this being done in the open with a nod and wink, you just have to conclude the whole system is fukked and we need a new one..

 

Why should anyone have "respect" for the law when something like this happens..? You catch a thieving scumbag red-handed, and nothing happens. I dont care that he was fined or that he might not ever work again, that's irrelevant.. Would a bank-robber who stole £50 grand get away with a fine or paying the money back..? Of course not.

 

As someone once said though, "the best way to rob a bank is to own one"....

 

But it's really just another in a long line of instances of fraud and corruption that The City and Wall St bankers seem to get away with on a regular basis. Look to murky depths of what's been going on at MF Global.. Where over a billion dollars of investors money in segregated accounts has somehow "gone missing".....

 

http://www.forbes.com/sites/francinemckenn...rom-coming-out/

http://www.efinancialnews.com/story/2012-0...d-a-crisis-plan

http://www.nypost.com/p/news/business/mf_g...iURrTtKEQvrzjdI

 

And politicians have the nerve to talk about "benefit cheats..". I mean, really.....

 

 

 

 

 

I can't help feeling that JC Flowers were worried that any court case would show them up as having inadequate safeguards against fraud.

 

Then again the report says "He had borrowed £7.47million to fund personal investments". How does that work? Doesn't the phrase "personal investments" mean you're using - and risking - your own money? I'll pop into the bank tomorrow and see how much they are willing to lend me for "personal investments".

I can't help feeling that JC Flowers were worried that any court case would show them up as having inadequate safeguards against fraud

 

That's precisely what it is. And just how the feck they can get away with doing that anyway. The Police should've had them for obstruction...

Good article in The Independent over the weekend, which kind of pinpoints why we should never take our eye off the ball as far the banks go..

 

Don’t be distracted by Goodwin’s dishonour

http://blogs.independent.co.uk/2012/02/02/...wins-dishonour/

 

Political distraction. That’s my basic view on the dishonouring of Fred Goodwin. The purpose is to divert public attention from the fact that ministers have failed to do anything about the scandal of the wholly undeserved pay of our too-big-to-fail bankers.

 

The Government’s humiliation over the Stephen Hester bonus affair was total. Despite big talk earlier this very month about encouraging shareholders to be more activist over executive pay, when it came to reining in the bonus of the chief executive of a bank that was majority-owned by the taxpayer, our ministers simply sat on their hands. It was only when Labour said they would force a House of Commons vote on the subject, that the Royal Bank of Scotland boss himself backed down. Everyone knows that the Government had been resigned to letting Mr Hester pocket his remuneration package. And having demonstrated their impotence over Mr Hester, the chances of the Government now curbing the rewards of the equally overpaid traders and executives of the likes of Barclays and HSBC are negligible.

 

The pay of bankers at large financial institutions – and not only those majority-owned by the taxpayer – represents a market failure of gargantuan proportions. When profits at these institutions were up in the boom, the bankers paid themselves a king’s ransom. When profits collapsed in the bust, they continued to enjoy lavish bonuses. And now that the share prices of their institutions are bouncing along the bottom, these same bankers are still in line for unfeasibly large rewards. There is no observable link between pay and performance here, and certainly none between employee remuneration and shareholder value. The only way to make money out of a big bank these days is to work for one.

 

To end this racket, the Government would have to be brave. It would need to ignore all the hysterical threats about an economically crippling exodus of “talent”, and dare to interfere in the remuneration of the executives and employees of Britain’s giant banks. There are perfectly sensible ways of doing this which will not ruin the City of London. Andy Haldane, of the Bank of England, has suggested that remuneration packages should be linked to a bank’s “return on assets”, rather than “return on equity” (something that allows bankers to make large profits by holding a dangerously small amount of capital).

 

But there is, sadly, no sign of the Government exploring any of this serious agenda. Instead, it has made a bid for short-term popularity by stripping an already discredited banker of his worthless gong. The public should not be fooled. We will know that the Government is serious about reforming the culture of reckless and overpaid finance when it stands up to a banker who still has some power.

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Goodwin should've lost his gong ages ago (New Labour should've really done something about it while still in power to be honest), but it almost certainly does seem like it's a distraction from what the main issues are - people like Sinha who are still in the industry and still committing massive frauds, and the continuing, never ending saga of the "too big to fail banks".. The banking industry and certain parts of the media want us all just to forget and to stop "banker bashing". What I say is, we should never stop being vigilant and the pressure should be maintained until this mess is sorted out once and for all...

We will always be at risk of complete financial meltdown until the bankers are lined up and torn a new one. Then the banking code needs to be rewritten, a robin hood tax brought in (If it's EU wide, how exactly are we going to loose banks? Not that they pay tax anyway, but it's far too expensive for them to move and in an EU wide tax where will they move their European operations too? Ukraine? Even then they are going to pay on every transaction in the EU still. Their threats is just an attempt to get Camoron and Oscunt to veto it because god forbid a bank should pay taxes), they need to start paying corporation tax, the square mile needs to have it's tax haven status stripped from it, outrageous bonuses should be taxed at a minimum of 50% (who the FUCK needs a £1m bonus?), director pay should be curbed (EU wide, and make it so any company operating in the EU has to abide by it. The yanks think they can police the internet and strip the domain's off foreign sites, two can play at that game Washington.) and finally, Investment banks should be banned from the high street and high street banks should be banned from investment banking. You want to do both? Fine, set up an umbrella corporation to be parent to both and have them run as entirely separate private (or public) limited companies so when the next "sub-prime" crisis occurs, the investment banks can go under leaving the highstreet banks with no exposure to the mass toxic debts and not require a bail out.

 

 

Clearly this will never happen, but one can dream.

 

The Aussie banking sector had some reform after the Asian Financial Crisis of the 90's and is now really stable. The government have an official 4 pillars policy preventing the 4 big banks from merging with one another so as not to create a bank that is too big. All 4 are now in the top12 in the world by market cap after big massive superbanks like RBS went tits up.

Cameron and Osbourne are opposing the Tobin (Robin Hood) tax on the grounds that UK institutions would be hit harder than other EU countries. However, as long as the money goes to the national exchequer rather than EU coffers, so what? Of course it would be grossly unfair to have a mechanism for raising EU funds where the burden falls overwhelmingly on one single country. However, if we can raise billions of pounds for the UK coffers by this route that leaves more scope in reducing taxes for the least prosperous Britons, reducing the deficit or a combination of both.

They don't pay tax as it is, so them contributing a little would be nice, considering we covered their CEO's bonus with that massive bailout.

We will always be at risk of complete financial meltdown until the bankers are lined up and torn a new one. Then the banking code needs to be rewritten, a robin hood tax brought in (If it's EU wide, how exactly are we going to loose banks? Not that they pay tax anyway, but it's far too expensive for them to move and in an EU wide tax where will they move their European operations too? Ukraine? Even then they are going to pay on every transaction in the EU still. Their threats is just an attempt to get Camoron and Oscunt to veto it because god forbid a bank should pay taxes), they need to start paying corporation tax, the square mile needs to have it's tax haven status stripped from it, outrageous bonuses should be taxed at a minimum of 50% (who the FUCK needs a £1m bonus?), director pay should be curbed (EU wide, and make it so any company operating in the EU has to abide by it. The yanks think they can police the internet and strip the domain's off foreign sites, two can play at that game Washington.) and finally, Investment banks should be banned from the high street and high street banks should be banned from investment banking. You want to do both? Fine, set up an umbrella corporation to be parent to both and have them run as entirely separate private (or public) limited companies so when the next "sub-prime" crisis occurs, the investment banks can go under leaving the highstreet banks with no exposure to the mass toxic debts and not require a bail out.

 

Spot on.... But I share your doubts that this will likely never happen.... :(