Compliance Carols

This is the time of year to roll out the platitudes and look back over the past 12 months, at the high points and low points  and this blog is no exception.

2014 has been a great year for compliance, mainly thanks to the numerous investigations into rate rigging, market

Christmas Candle

manipulation and sanctions breaches which although on a global scale, have affected the Asia Pacific region.

Terrorist financing

Starting on a very sombre note, the Australian police force has arrested and charged two men with giving AUD15,000 to ISIS by funding flights for Australians who went to join the jihad in Syria. There is no evidence linking this to the tragic siege in a Sydney cafe in December, perpetrated by an apparently mentally ill man. Nor are their any direct links between that and the barbaric terrorist attack on a school in Peshawar carried out by the Taliban who murdered more than 130 people, the majority of whom were children. Who is funding the Taliban? The UK, US and foreign aid budgets have been variously named as unwitting donors. But that is all old news. Terror was still being funded in 2014.

Last Christmas I broke the law for you

BNP have claimed the top of the Christmas tree this year with their admission to breaching US sanctions on Sudan, Iran and Cuba, accepting the largest financial penalty to date issued for this type of breach, an eye watering USD8.97bn, which is roughly how much money it sluiced for sanctioned entities between 2004 and 2012. The penalty has focused attention on sanctions, and upon the intricate systems used by BNP to hide transactions.

He sees when you are grafting, he knows when you’r e on the take

Corruption gained a very high profile in APAC this year, with President Xi Jinping launching merciless attacks on former allies and fellow politicians who have skimmed from the national coffers. Although some view this as a political purge with corruption used as an overcoat, the message sent out is loud and clear: you’d better watch out, you’d better not graft.

Lonely this Christmas

Hong Kong’s Independent Commission Against Corruption officers will surely be celebrating this week  as it landed a prize scalp. A jury found HK’s former second official – Rafael Hui – guilty of accepting HK$8.5m (£700,000) from executives of the Sun Hung Kai Properties development company. The case has exposed the intricate links between the SAR’s government and powerful property developers; Hui’s case is the latest conviction. He is due to be sentenced in time for Christmas in Hong Kong’s jail, which will be a far less chilling residency than those of peers in Mainland China.

All you want for Christmas is a job in KYC

Recruitment in Asia Pacific compliance is still booming. Banks in Hong Kong are looking for lawyers to shore up their regulatory defences but all is not lost for those without a law degree. Back in August, recruiters in Singapore were crying out for customer on boarding and know your customer specialists, as well as project managers to fill posts. While the legal eagle-eye view on financial crime is still viewed as a safe bet, firms still need hands-on practitioners to do the real work.

Financially include the world

One of the biggest campaigns to gain ground in 2014 is the rally behind financial inclusion –  lead by various non-governmental organisations including the Bangkok head-quartered  Alliance for Financial Inclusion. Financial inclusion aims to provide appropriate financial services to those who are excluded from the financial sector and as a result, are at the mercy of ruthless money lenders, usurers and criminals who use exploitation – whether via labour or sex – to earn money. If you could borrow money from someone who would not try to sell you or your children into slavery, you would, wouldn’t you? If the world’s biggest banks are looking in earnest to change their reputations for the good, they could do worse than to reach out to the less profitable sections of society, who could do with some support.

12 corps avoiding… or is that evading?

To round off with some festive cheer, let’s all join in with a rousing chorus of the 12 Tax Dodgers of Christmas, 38Degrees’ reworking of a popular Xmas carol to highlight those who chose to hide their wealth rather than paying taxes in the country where they make their vast fortunes. Step up Amazon, Caffe Nero, Johnny Walker et al.

Or maybe it should be‘O come all ye shameful.’

First published on the ICA blog in December 2014.

The banking sector is still rewarding poor conduct

Senator Elizabeth Warren tore into Federal Reserve officials this week for not jailing a single banking executive in relation to their role in the collapse of the banking system. Senator Warren is making sure that US society, government and the banking sector does not forget that instead of punishing those who caused and oversaw the collapse, we are rewarding them.

The four biggest financial institutions [in the US] are 40% bigger than they were five years ago and the five biggest banking institutions have more than half of all the banking assets in the US, Warren told Bloomberg in this video. JPMorgan Chase CEO Jamie Dimon received a hefty bonus after negotiating a settlement with the feds over his bank’s involvement in the mortgage crisis, the Washington Times reported.

No deterrents

There are no deterrents for poor conduct in banking. You can break the whole system, make a tidy profit for yourself and stay employed. Bankers have got it made; governments gave them the keys to the coffers. Bankers are thought to be arrogant, but is that any wonder when you are in a position of great power and impunity?

I left the UK for Asia a few months after Lehman’s collapsed and I am getting back in touch with the banking world in the UK for the first time in five years. Although some of the edges have been worn off, the swaggering arrogance of banking executives is still apparent.

“Banker bashing must stop now,” one offshore banker determined to push the merits of his financial centre to Russian and Chinese clientèle told a packed conference hall. The people who raised the alarm on the extent of the financial crisis are dubbed ideologists who want simple solutions to complex problems by another British business leader. Their comments encapsulated the struggle that banking will face when trying to change its motivation from money to doing the right thing.

Professional standards

Not all in the banking world have the same attitude. Creating professional standards for bankers and playing up the benefits of doing well by doing good are the new battle cries of the financial services sector in the UK.. Although real changes are afoot, it will take half a generation or around 15 years according to representative from one institution, before we see the benefits of compliance universities and courses on ethics for bankers. We could wonder why it will take so long if we know where we need to go, but when you hear hardcore investment bankers talking about compliance and ethics as intrinsic to restoring confidence in the financial sector, you can’t help but think that enormous fines for criminal and regulatory failures have hit the spot.

Many banking insiders do not want change; they are happy with their set up. And that may be why it will take 15 years to see changes in the industry. Meanwhile, new payment products and services, crypto-currencies and other innovations will keep moving forward and gaining more ground, more users, more market share.

Related articles

• Elizabeth Warren: Jamie Dimon Gets $8.5 Million Raise for Illegal Conduct at JPMorgan
• Banker group pushes for loose regulation of prepaid cards
• The insolvent United States banking system: lessons from J.P. Morgan Chase

Hong Kong’s wealth industry to focus on compliance and ethics

Hong Kong

Imagine the scenario. Sandy, a relationship manager with a private wealth company in Hong Kong has hit only 50 per cent of her quarterly sales target. In the cut-throat world of trickle down economics, not meeting the target means that Sandy will not earn a salary-making bonus and more importantly, will lose her job. Sandy needs to hook a major client with more than a few million kicking around to invest. So when a client that Sandy has been chasing for a couple of months finally calls for a meeting and offers a deal that could take our RM over target and into the firm’s very good books, how cautiously will Sandy approach the deal? Would a private wealth relationship manager refuse the business of a multi-million dollar client if there are apparent red flags for money laundering, corruption or tax evasion? Would they try to side step customer due diligence? Would they even recognise the red flags in the first place?

The Hong Kong Monetary Authority (HKMA) has endorsed a brand new standard for private wealth managers which should go some way to answering the questions raised here. The Enhanced Competency Framework (ECF) encourages customer-facing employees – the relationship managers who often know their clients better than any other bank employee – to upgrade their skills and practice in terms of competency, compliance and ethics.

A relationship manager is best placed to identify when a client’s requests or account activity is suspicious or not in line with their usual account activity. However, incentive schemes which encourage relationship managers to sign up clients in an increasingly competitive market can raise issues around ethical behaviour.

It is important to note that the standards are non-statutory, which means that practitioners can volunteer to take the training courses to gen up on professional competency, compliance and ethics, but they are not required to do so. Although this removes some of the impact these standards could have had on the private wealth management industry, it is still a step in the right direction. The ECF will be administered by the Private Wealth Management Association, an industry group, and the framework does reflect an increased industry interest in improving and maintaining professional standards. Past attitudes to training on compliance and anti-money laundering in Hong Kong has varied between institutions.

Hong Kong, living the high life

One firm I know of has experienced great challenges in convincing HK based financial institutions of the need to train employees. Perhaps the new standards and the HKMA backing hint at a change in how institutions are approaching business. Making these standards a statutory requirement would show that Hong Kong is taking competency, compliance and ethics in the private wealth management seriously.

Cleaning up the murky world of private wealth in Hong Kong could shed light on some of the practices which have allowed some in the city to amass enormous wealth, and left others languishing.

Thailand: AMLO publishes list of rogue bank accounts

Thailand may be in the midst of political turmoil but the Anti-Money Laundering Office is still on track. The AMLO scored a victory yesterday in publishing details of more than 200 suspicious bank accounts. The accounts appear to have been opened in connection with a large-scale fraud.

Secretary of the AMLO, Pol Col Sehanart Prayoonrat

The scam looks like a boiler room set up using a nation-wide campaign to contact potential victims. The con-artists convinced people to cough up cash, for unknown reasons, and send it to one of the 203 bank accounts uncovered in the AMLO probe. The accounts were all set up by a group of smurfs, probably unconnected to the fraudsters.

Contact the AMLO for the list of accounts.

Source: National News Bureau of Thailand

Planned changes to UAE regulations

The days of transactional financial advice with a one-size-fits-all approach will soon be consigned to history

James Thomas, ACUMA — Independent Financial Advice

Regulation — hardly the most emotive word, but one that should be welcomed with open arms as it thankfully increases its presence in the finance world here in the UAE. Whether you are a client, an adviser or just believe in fairness, transparency and accountability for all, there are imminent regulatory enhancements to the financial services industry in the UAE looming large on the horizon.

Previously there has been a number of separate regulatory bodies working independently of each other, but this situation is about to change, with new rules, vastly increased capital adequacy levels, and new requirements for minimum qualification levels.

Appropriate, tailored, transparent and easy-to-understand financial advice is of paramount importance to everyone. With this in mind, the fast-approaching regulatory changes and enhancements will be a massive step towards ensuring that you sleep comfortably at night knowing the financial security you crave for you and your loved ones is in safe, professional and supervised hands.

My simple view is that if I ever required some form of surgical procedure, I would ensure that the person operating on me was fully qualified and had the resources to do so effectively. I see no difference in the requirements for ensuring the appropriate and effective management of someone’s personal finances.

As this country continues to grow, emerge and increasingly embrace a pivotal role in the financial services industry, the days of transactional financial advice with a one-size-fits-all approach will soon be consigned to history.

Bank guarantee

As part of this process, the UAE insurance authority notified financial advisory firms late last year that to remain in business in the UAE they would need a paid-up capital of Dh3 million instead of Dh1 million by November, and they would also need to have a further Dh3 million lodged as a bank guarantee. An additional Dh1 million must also be put down for every additional branch they have, while the company that your financial consultant represents will have to adhere to strict regulatory requirements, as well as a robust internal infrastructure via independent, qualified and non-income-generating employees.

The good news for you, the reader and investor, is that no longer will you be just another individual who was promised the earth but found out all too soon that congruency is a rare commodity. Within months rather than years, regular reviews, transparency of remuneration, compulsory licences and qualifications across the board will be essential.

Much like other regulated jurisdictions such as the USA and the UK, the UAE has realised that it needs to update its regulatory framework to offer better levels of consumer protection. However, a word of warning: even with this change of regulation, you should not forget about your own due diligence when choosing a company or financial adviser.

Proof of qualifications

You still need be on your toes when it comes to deciding who will help you achieve the financial independence and security that you desire. Ask for proof of qualifications, testimonials from current clients, number of years in the industry, details of licences; and whether the person sitting opposite you works for an independent company that will work on your behalf to find the most appropriate solution, or is a tied agent and can offer only limited and potentially restricted advice.

While none of these changes will necessarily guarantee that clients get better advice, it should work towards a much more professional environment with a lot less unregulated, unqualified sales people offering poor ill-thought out advice, with their interests first rather than that of the client. Going forwards clients should receive advice from a qualified advisor, who works for a regulated company, with due recourse should this be necessary. A huge step forward, I’m sure you would agree.

 

 

Source: gulfnews

Related articles

• Jersey eyes closer ties with UAE financial sector

Insider trading: MAS takes action against former Maybank employee for insider trading

SINGAPORE — The Monetary Authority of Singapore (MAS) has taken civil penalty action against a man for insider trading.

Koh Huat Heng was a relationship manager and a team head in the Affluent Banking Unit of Malayan Banking Singapore branch (Maybank).

On June 18 last year, Koh purchased 140,000 shares in SGX-listed Sin Heng Machinery, while he was holding on to non-public and price-sensitive information concerning Sin Heng’s planned rights issue.

The company subsequently announced a rights issue of up to 114.8 million shares at 16 cents each on June 23 last year.

Koh has paid MAS a civil penalty of S$50,000 for contravening the Securities & Futures Act.

He is also prohibited from providing any financial advisory service or becoming a substantial shareholder of a licensed financial advisor for three years.

MAS Assistant Managing Director (Capital Markets), Mr Lee Boon Ngiap said: “MAS expects a person who has been appointed as a representative of a financial advisor to act honestly and with integrity, especially in relation to the information that he obtains in the course of his work. To maintain the public’s confidence in our financial services sector, we will take firm action against any representative who fails to do so.”

A civil penalty action is not a criminal action and does not attract criminal sanctions. The regime, which became operational in 2004, aims to provide a nuanced approach to combat market misconduct. CHANNEL NEWSASIA

 

 

Source: TodayOnline

Related articles

• Wall Street Beaten in Southeast Asia Opens Door for Maybank

Exclusive: FinCEN went after MSB heads, caught a compliance head

Read this excellent article from Brett Wolf, renowned AML journalist.

In bid to punish individual, FinCEN pursued MoneyGram business leaders, but caught compliance chief – source

NEW YORK, May 20, 2014 (Thomson Reuters Accelus) – Although investigators with Treasury’s anti-money laundering unit tried to identify a senior business leader at MoneyGram International Inc who could be penalized over the money transfer giant’s admitted compliance failures, available evidence left them only one viable target – the firm’s former chief compliance officer, a former official with firsthand knowledge of the investigation said.

The push by Treasury’s Financial Crimes Enforcement Network (FinCEN) to send a stern message to the financial services community by targeting one of its own with a large fine began roughly a year and a half ago due to pressure from Capitol Hill. FinCEN investigators eyed a number of current and former MoneyGram employees, but found that senior business leaders had not left an evidence trail to follow.

However, investigators uncovered “strong” evidence suggesting that former compliance chief Thomas Haider played a key role in the anti-money laundering compliance lapses MoneyGram conceded in 2012 as part of a settlement with the Justice Department, the source said.

The source, who is now in the private sector and asked not to be named, refused to describe the specific evidence against Haider, citing concern that doing so would violate federal law.

Haider’s lawyer, Ian Comisky, a partner with Blank Rome in Philadelphia, did not respond to a request for comment.

FinCEN previously declined to comment on the Haider matter.

The decision to seek out someone at MoneyGram who could be held responsible for the firm’s compliance failures was handed down by FinCEN director Jennifer Shasky Calvery shortly after she assumed her post in September 2012, two former officials who were with the bureau at the time said.

An exclusive article published by Compliance Complete a month ago revealed FinCEN is pursuing Haider and plans to penalize him as much as $5 million for his role in the breakdown in the firm’s controls aimed at detecting, and ultimately reporting to the government, transactions linked to criminal activity.

The regulatory action against Haider has not been resolved. Still, Haider last month was asked to take an indefinite leave of absence from his job lobbying for a league of credit unions over the matter, as previously reported by Compliance Complete.

Making an example

After Compliance Complete uncovered FinCEN’s pursuit of Haider, many in the compliance community questioned why a former compliance professional was targeted, why a multi-million dollar fine seemed appropriate to the Treasury bureau, and why it opted to punish someone linked to MoneyGram rather than a banker at HSBC or another institution. This article seeks to provide answers.

Shasky chose MoneyGram, at least in part because unlike banks, money transfer businesses and their employees have no other federal regulator capable of penalizing them for non-compliance with anti-laundering rules, sources with firsthand knowledge said. Shasky has said publicly that her priorities as FinCEN director include bringing the money transfer industry into better compliance with anti-laundering rules.

Still, HSBC, which in December 2012 agreed to pay $1.9 billion to settle allegations it allowed drug cartels to wash hundreds of millions of dollars, was a driving force behind Shasky’s decision, the sources said. The settlement prompted Senate hearings where regulators were chastised for not catching the problem sooner and for failing to punish the individual bankers responsible.

When David Cohen, Treasury’s undersecretary for terrorism and financial intelligence, testified at a Senate Banking Committee hearing in March 2013, it was clear he felt the congressional pressure to hold individuals responsible for financial institutions’ anti-money laundering failures.

Cohen, who is Shasky’s boss, told the lawmakers that FinCEN had been instructed to look for opportunities to hold individuals accountable.

Evidence available to FinCEN investigators suggested that Haider, who was chief compliance officer of MoneyGram during most of the time it operated with anti-laundering weaknesses in the 2000s, was the right person to make an example of, the former official with firsthand knowledge said.

Public policy implications

The former FinCEN official said top officials at the bureau were mindful of the public policy implications of targeting a compliance officer, adding there were high-level discussions about the fact that moving forward, a practitioner might be more reluctant to cooperate with law enforcement officials and regulators “if he is worried that what he says might be used against him to try to take his house away.”

“All of this is complicated. It’s easy when you’re in the Senate to say ‘Do this,’” the source said.

FinCEN has decided that the same calculation used to determine the maximum size of a penalty against an institution should be used when penalizing an individual, the source said, describing it as a “mechanical exercise.”

The number of Bank Secrecy Act reports that were not properly made is tallied, as are the number of days when the institution operated with an inadequate anti-money laundering program, and these failures each have a specified maximum penalty attached, the source said.

The fact that a compliance officer is the subject of an enforcement action, regardless of the amount, “will cause all compliance officers to think” about their choice of professions, said Rob Rowe, a lawyer with the American Bankers Association’s Center for Legal and Regulatory Compliance.

FinCEN’s fine against Haider coupled with added regulatory pressure on compliance officers in the wake of the HSBC settlement and an “onslaught” of new regulations could “lead to a shortage of compliance officers,” Rowe said.

“No one will want to do the job,” he said.

In fight over fine, Haider would face U.S. prosecutor in Manhattan

If a penalty is assessed to Haider and he refuses to pay, the Justice Department would be called upon to represent FinCEN in District Court.

Typically the DoJ’s Federal Programs division would handle such a matter, but not in this case.

At the request of FinCEN, Preet Bharara, the U.S. Attorney in Manhattan, agreed to litigate the matter if necessary, two sources said. A spokeswoman for Bharara’s office declined comment.

(This article was produced by the Compliance Complete service of Thomson Reuters Accelus. Compliance Complete provides a single source for regulatory news, analysis, rules and developments, with global coverage of more than 400 regulators and exchanges. Follow Accelus compliance news on Twitter: @GRC_Accelus)

Source: Reuters

Related articles

• Exclusive: U.S. anti-money laundering authority faces hiring probe – sources
• Treasury may hit compliance officer with $5 million fine

The financial services industry is one of Europe’s greatest assets? Brussels, we have a problem

Last week, the European Commission (EC) slapped itself on the back a few times, with a congratulatory speech about all the things it has done since 2008 to repair the immense damage done to the economy by the financial services industry. EC President José Manuel Barroso claimed the financial services industry as one of Europe’s greatest assets as well a listing various achievements including the banker bonus cap, increasing reserves, scrutinising hedge funds, rating agencies, and improving consumer protection.

My initial thought was something about horses running amok in meadow and Barroso and his pals carefully closing the gate. But then, credit where it is due, some action on behalf of the EC is better than nothing done to rebalance the inequalities exploited by the  financial services sector which allowed institutions and individuals to pay themselves ridiculous bonuses, make opaque trades and leave consumers exposed to the risks of actions taken by others.

The bonus cap confusion

Back in March, when the EC announced its plans to curb the excessive bonuses paid to certain employees of the banking industry, the UK released its strategy for getting around the rule. The EC rule limits a bonus to no more than the fixed salary, or twice that level if approved by the bank’s shareholders, and will affect 2014 awards to be handed out early next year. In response to the new law HSBC, the world’s local money launderer, announced  that it will give new “allowances” – expected to take the form of monthly or quarterly payments in cash or shares – to senior staff to boost their fixed pay, meaning that higher bonuses could then be awarded.  The same bank has, however, opted to cut its Chairman’s proposed GBP3.25m  bonus to a measly GBP1m. UK institutions Lloyds and Barclays indicated they would also seek a way around the bonus cap. The UK Government opted to fight the EU’s bonus cap in court and started a legal challenge against the EU, which it lost.

While the UK government sent a strongly worded letter to banks in April, warning them to cut bonuses or face tighter controls, banks have retaliated with a complaint that they will lose their competitive edge in the search for talent and fear the best candidates might all take jobs in the US instead. At least the UK managed to show some mettle and stop the 200 per cent bonuses that RBS – now owned by the UK government since its spectacular bail out in 2008 and 2009 – had scheduled to pay some employees.

Other great assets of Europe

Here is a list of some other great European assets, at least in my opinion. Would you agree?

The Eurovision Song Contest 

Conchita Wurst

The annual paean to the much maligned European pop-song which unites the world for one night a year in awe of this astounding show, and the ever more outlandish performers. Congratulations to Conchita Wurst, the Austrian bearded drag act who won 2014’s content. Her ‘Rise Like a Phoenix’ is no ‘Waterloo’ but the public vote for a champion of tolerance was one in the eye for the countries who have decided to outlaw and punish anything that falls out of the boundaries of heterosexual acts for procreation. I am looking at you India, Nigeria, Russia, Tanzania, Sierra Leone, Uganda, for starters.  Iran, Mauritania, Saudi Arabia, Sudan and Yemen have made homosexuality punishable by death.

 

 

The European Southern Observatory, Chile.

Since five European countries signed the ESO convention in 1962, researchers have discovered that the universe is expanding and accelerating as it gets bigger, earning Nobel Physics Prizes for the lead discoverers. They have discovered an Earth sized planet in the star system next door, made the first accurate measurements of the planet Pluto and its moon Charon and found the biggest star ever, see image right.

Eurotrash

The sadly missed late-night satirical magazine show presented by Antoine de Caunes and Jean-Paul Gaultier, hamming up the French accent for ze British viewerz. The show shed light on some less well known aspects of European life, generally making a mockery of the entire system and reminding us not to take it all so seriously. The term Eurotrash has been used to describe those perceived to be ‘arrogant, lower-class, expatriates’ living in New York. NSFW in the slightest.

Caves

Skocjan Caves

The Eisriesenwelt (German for “World of the Ice Giants”) in Austria is largest ice cave in the world, extending more than 42km (26 miles). The Skocjan cave system in Slovenia includes the highest cave hall in Europe. Or what about the cave paintings at Lascaux in France, a humble message to the future sent by human beings more than 17,000 years ago.

CERN – the European Centre for Nuclear Research

The Big Bang?

Where to begin? The biggest particle physics lab in the world has worked continuously to solve some of the biggest mysteries of the universe. On the way, its researchers invented the world wide web in 1989, created stable atoms of antimatter in 2010 and brought us closer to understanding our existence by discovering the Higgs boson in 2013 resulting in Nobel Prizes for the lead researchers. CERN is 60 this year, celebrating  science for peace is its anniversary strap line.

Honourable mention for achievements in the European Financial Services Sector

The EC has done one thing that this European Union citizen considers worth an honourable mention in this list. It now allows me to transfer funds free of charge between my bank in the UK and other banks in the Single European Payments Area. Steps like this have a impact on consumers; it saves them money. This took years to devise and implement when it could have changed retail banking a long time ago. Everything else on Barroso’s list will take a long time to touch the consumer population.

Related articles

• Official: Wurst win good for European gay rights

India: ML through trade, now real estate

It looks like India is trying to catch up with the rest of the world on money laundering methods. Last week we saw the emergence of news stories linking trade to money laundering; the anti-money laundering (AML) sector globally and International Chamber of Commerce have been talking about trade based money laundering for years, so much so that the phrase is now abbreviated to TBML.

This week, we read news that the Indian Enforcement Directorate has come around to the idea that construction projects are also a great way to launder and hide the proceeds of crime from prying eyes. A headline in the Financial Express drew attention to the massive potential for laundering cash through the real estate sector in India.

DDA flats next to a slum, New Delhi

Public construction works take years to complete in India, as seen prior to the Commonwealth Games 2010, when unfinished projects were hidden behind temporary hoardings as the money to complete them had mysteriously dried up. Some of the temporary hoarding was still there when I left in 2012. A project to concrete over an  open storm drain-cum-open sewer which runs through Defence Colony, one of South Delhi’s fanciest neighbourhoods, was started in the mid 2000s. By 2012, it was still under construction. I saw a group of 20 or so workers at any one time hanging around or working on the project. Most of them lived under blue tarpaulin sheets strung from fences bordering the drain.

But life in India is not always thus for the wealthier residents. Buying property in the political capital – New Delhi – and financial centre – Bombay – is a privilege that only the wealthy can afford. In Delhi, the city government started to build blocks of affordable housing through the Delhi Development Authority (DDA) in the mid 1960s and many middle class families live in these apartments. The DDA plans to launch a new housing scheme in 2014.

Other housing options, New Delhi

Private housing prices are, pardon the pun, through the roof with many transactions being made privately, directly between buyer and seller. Property is often bought for cash which is not banked. Architects are regularly asked to build false walls into properties for hiding cash at home. Building regulations, illegal construction and legal disputes often mean housing stands empty, while the courts process the cases which often take years to settle. A lot of real estate is also built on disputed land in India. In New Delhi, some of the cities most salubrious and extravagant properties are in fact built on disputed land, which will never be challenged as the residents have enough power to ensure it will never be investigated.

 

Related articles

• Indian trade based money laundering worth USD302m
• SUVs, posh villas, pricey plots purchased from NSEL funds: Enforcement Directorate

SAC’s Steinberg gets 3-1/2 years prison for insider trading

(Reuters) – Michael Steinberg, a portfolio manager at Steven A. Cohen’s SAC Capital Advisors hedge fund, was sentenced on Friday to 3-1/2 years in prison for insider trading.

The sentence was imposed by U.S. District Judge Richard Sullivan in Manhattan, five months after a federal jury convicted Steinberg on securities fraud and conspiracy charges, in a case stemming from a broad crackdown on insider trading on Wall Street.

Steinberg’s lawyers had asked for no more than two years in prison, while prosecutors had argued for up to 6-1/2 years.

Sullivan also ordered Steinberg to pay a $2 million fine and forfeit $365,142, a sum the government says Steinberg and an SAC analyst were paid from the illegal trading profits.

Dozens of family members and friends attended the sentencing and sent letters to the judge. The letters, Sullivan said, described Steinberg in a positive light that set him apart from other defendants he had sentenced.

“If it were only based on the character of this man, it would be easy, because I do think this is a good man,” he said. “But I do have to consider the crime here.”

Prosecutors accused Steinberg of trading on illegal tips about Dell Inc and Nvidia Corp passed to him by an SAC analyst, who admitted to swapping confidential information among a group of analysts at other hedge funds. Steinberg’s trading resulted in illegal profits of $1.82 million, prosecutors said.

Steinberg, 42, is one of eight current or former SAC Capital employees to be convicted on insider trading charges.

SAC pleaded guilty to fraud charges and has agreed to pay $1.8 billion in criminal and civil settlements.

The Stamford, Connecticut-based firm has rebranded itself Point72 Asset Management as it shifts to being a family office managing Cohen’s fortune.

Sullivan granted Steinberg bail, pending an appeal.

The appeal is expected to focus on Sullivan’s not having required the government to prove that Steinberg knew the insider who originally disclosed non-public information had received a benefit for making the disclosure.

Todd Newman, a former portfolio manager at Diamondback Capital Management, and Anthony Chiasson, co-founder of Level Global Investors, are appealing on similar grounds stemming from convictions in a separate trial Sullivan also oversaw.

During appellate arguments in Newman and Chiasson’s case last month, some judges questioned whether Sullivan’s interpretation of the insider trading law was correct.

Sullivan on Friday noted the arguments, saying the issue appeared to be “a closer call than I thought.”

Steinberg’s sentence was less severe than those of Newman and Chiasson, who in 2013 received terms from Sullivan of 4-1/2 years and 6-1/2 years in prison, respectively.

Cohen has not been criminally charged. The U.S. Securities and Exchange Commission is seeking to bar Cohen from the securities industry for failing to supervise Steinberg and another portfolio manager and prevent insider trading. Cohen denies wrongdoing.

The case is U.S. v. Steinberg, U.S. District Court, Southern District of New York, No. 12-cr-00121.

(Reporting by Nate Raymond in New York, additional reporting by Jonathan Stempel and Joseph Ax, Editing by Franklin Paul and Gunna Dickson)

Source: Reuters