Tuesday, July 03, 2007

Open season on Dubai banks?

In a move the Weasel finds hard to comprehend the DFSA appears to have declined to investigate a reputed attempted fraud of $5 bn.

why?

Because it was targeted against an institution not an individual, leaving aside the bloody obvious that a bank's money belongs to individuals who most certainly would have suffered should this scam have worked, what were they thinking?

Does this mean if the Weasel wanders into, lets say Dewa or any other "big institution" and for instance bounces a cheque for his water bill that he will be let off scot free....... nope, he doesn't think so either.

The jails in this town are full of people charged with fraud for bouncing a cheque, so perhaps the story here isn't, why not?

but who can't be investigated?

And this is personal, although called lloyds TSB it isn't a direct branch of the bank and it is probably likely that a loss of this size would have folded the institution, taking the Weasels 2dhs of savings with it. The lack of action cannot do anything to inspire confidence in any financial institution in Dubai

From the Toady today.

The United Kingdom-based banking and insurance group Lloyds TSB Bank, operating from Dubai International Financial Centre (DIFC), has left it to the regulators, the Dubai Financial Services Authority (DFSA), to investigate the $5 billion (Dh18.35bn) financial fraud targeted at the bank.

Media reports had said Lloyds TSB Bank in Dubai had been targeted by fraudsters who tried to raise a credit facility of up to $5bn (Dh18.35bn), in one of the largest attempted financial frauds in the region in recent times.

The regulators said individuals representing two fictitious organisations – Heritage Private Bank of the UK and the Genesis Foundation of Hong Kong – failed in their attempt to use false guarantee documents from five banks, including UBS, the US Federal Reserve and Citibank in Singapore, in a bid to raise funds for an alleged real estate project in Abu Dhabi, the Financial Times reported.

Lloyds TSB’s private banking arm, located in the DIFC, had said in early May it provided information about the use of fraudulent documents to the DFSA.

“Lloyds TSB International Private Banking takes its obligations to combat financial crime extremely seriously and reported an attempted use of fraudulent documents to the DFSA in the appropriate way in early May. This is now a matter for the regulator and we will co-operate fully with any investigation they undertake,” the bank’s spokesperson said in a statement.

Quoting DFSA’s managing director for policy and legal services, Ian Johnston, the Financial Times said after carrying out an investigation the regulator had decided not to pursue injunctions against the individuals involved, as the scam had targeted authorised companies rather than members of the public.

The official pointed out that the fraud attempt, while substantial, was unsophisticated and unlikely to have duped the vetting procedures of authorised companies.

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