Category Archives: Kleptocracy

Bill Cara Predicts Massive Rebellion

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Canadian trader/pundit/activist and all around good citizen, Bill Cara, isn’t one given to apocalyptic statements, but here he is  sounding the fire alarm and predicting a massive rush for the exits on Barack Obama’s watch:

 February 13, 2009 by Bill Cara

[5:25am ET] I believe that Humungous Bank and Broker (HB&B) is purposefully and systematically destroying the stock-broking, insurance-broking and mortgage-broking industries and that nothing good will come of this process. Because the principle of independent research, objective analysis and free choice is being increasingly denied us, the public is becoming a bank chattel. At some point, there will be a massive rebellion. I believe this event will occur on President Obama’s watch.

At the end of the day, the President and HB&B will see they have gone down the wrong road. That will become obvious when depositors cause runs on the banks, withdrawing their paper money to exchange it in the streets for gold and silver.

The bankers’ scam of precious metals futures that fail to deliver anything but fiat money and their phony derivatives-based precious metals exchange traded funds (ETFs) like GLD and SLV will crash at some point as investors increasingly put their faith in physical money, not in the credit system or the US Dollar.

I implore President Obama to reject the advice he is getting from bankers, and to listen to the anti-bank lobby before the people take matters, like money, into their own hands.

http://en.wikipedia.org/wiki/Bank_run
http://en.wikipedia.org/wiki/Rebellion
http://en.wikipedia.org/wiki/Exchange-traded_fund
http://www.investopedia.com/terms/f/fiatmoney.asp

More here.

And this from Ned Schmidt, of the Value View Gold Report:

 “The era of monetary madness and “saw dust” economic policies on the part of governments that we have so long feared appears to have arrived. Again, it seems the Gold Bugs have the intellectual high ground.

 

Rarely do we look to politicians for honest statements. Perhaps for that reason, recent words of a Chinese official were so refreshing. The following from the Financial Times on Thursday says it all,

 

“Luo Ping, a director-general at the China Banking Regulatory Commission, said after a speech in New York yesterday that China would continue to buy Treasuries in spite of its misgivings about US finances.”

 

“‘Except for US Treasuries, what can you hold?’ he asked. ‘Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.’ Mr Luo . . .added.”

 

“‘We hate you guys [U.S.]. Once you start issuing $1 trillion-$2 trillion [of debt] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.’”[Emphasis added.]”

 

 From Byron King:  Own gold. How much? For now, the more, the better. Own coins, if you can get ’em. Own bullion, if you can get it. Own shares in good miners with reserves in the ground while you can buy ’em. Just get some gold.”

                        Mark Hulbert: When sentiment is this strong, gold usually goes down.

 

 

Full Disclosure: I have no financial connection what so ever to any of the newsletters or investment gurus I’m quoting here or any where else on this site. I pick the material solely on how useful it seems to me.  Doug Casey (whom I quoted in an earlier post) is  an associate or partner(?) of Bill Bonner of Agora Inc., with whom I wrote my last book, but beyond the book and my PT work for Agora on Bonner’s columns/the book during November 2005 – October 2007, I have no financial dealings with either of them or their employees, affiliates, or partners.

 

More Madoff: Bernie’s Web Of Deceit (Updated Feb 12, 2009)

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I keep wanting to look up every other money laundering scheme I can think of (like BCCI), because that’s what the Madoff case reminds me of.

First there’s the unbelievable extent of the fraud –  all over the US and Europe as well as Asia.

Here is a chart showing the range of groups hit.

Here’s another, also from muckety.

And this is the Wall Street Journal’s list of Madoff clients.

Then there is its brazenness – it seems to have burgeoned right under the noses of regulators. In fact, the regulators seem to have been complicit in it, as this report by David Sirota seems to indicate: the SEC was stone-walling questions about their role at the Financial Services Committee Hearing last week (they invoked executive privilege).

Meanwhile, it turns out that Madoff’s wife withdrew $15 .5 million from a brokerage in Boston related to the main scheme, 10 million of  it on the day he ‘fessed up.

On Monday, Madoff agreed not to contest fraud charges in the civil suit brought against him by the SEC (there’s also a criminal suit) and prosecutors have agreed to a 30 day extension of the deadline for indictment (to March 13), raising the possibility that Madoff could escape a jury trial through a plea bargain.

Force X And The Roads Leading To 9-11

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The more I read, the more I feel that it’s a big mistake to skirt 9-11 research on the grounds that its a whole area to itself and distracts from ongoing issues (Madoff, the bail-out, etc).

Of course, I’ve never bought the notion of some people on the left that talking “conspiracy” discredits or calls into question a journalist. On the contrary.

First, to accept the evidence of conspiratorial politics is not to become a full-fledged “conspiracist.”  It isn’t a step from 9-11 theory-making into believing in shape-shifting lizards.

(Although that’s what clever media manipulators would have you believe…and it’s what masses of readers are brainwashed into believing).

Second, anyone who fails to see that there’s rather clear evidence of the work of conspiratorial groups (what was Madoff’s scheme except a conspiracy?) is either brainwashed or part of government propaganda.

Today, reading and rereading the material surrounding 9-11, US drug trafficking, BCCI, money-laundering and the Nasdaq,  I’m more than ever sure that it’s a mistake to skirt 9-11, as I’ve been doing so far.

Here’s what Peter Dale Scott, a leading researcher on things related, has to say:

“My personal suggestion to 9/11 researchers is that they focus on the connections of the meta-group’s firm Far West, Ltd. – in particular those which lead to Khashoggi, Berezovskii, Halliburton and Dick Cheney, and Diligence, Joe Allbaugh, and Neil Bush….”

And:

“Once the local power of drug armies was enough in itself to neutralize the imposition of state authority. But today there are increasing signs that those at the highest level of the drug traffic will plot with the leaders of major states to ensure, or even to stage, violence that serves the power of the state and the industry alike.

Thanks to extensive research in Russia, we now have initial evidence of a second and even more significant proposition: There exists on the global level a drug meta-group, able to manipulate the resources of the drug traffic for its own political and business ends, without being at risk for actual trafficking. These ends include the creation of designed violence to serve the purposes of cabals in political power – most conspicuously in the case of the Yeltsin “family” in the Kremlin, but allegedly, according to Russian sources, also for those currently in power in the United States.

One piece of evidence for this consists in a meeting which took place in July 1999 in southern France near Nice, at the villa in Beaulieu of Adnan Khashoggi, once called “the richest man in the world.” Those at the meeting included a member of the Yeltsin cabal in the Kremlin and four representatives from the meta-group, with passports from Venezuela, Turkey, United Arab Emirates and Germany. Between them they allegedly enjoyed excellent relations with:

1) Ayman al-Zawahiri, the acknowledged mastermind of 9/11 and senior mentor to Osama bin Laden.

2) Soviet military intelligence.

3) the FARC, the Colombian revolutionary group that has become increasingly involved in the drug traffic.

4) the Kosovo Liberation Army, a similarly involved group.

5) (according to a well-informed Russian source) the CIA.

The third important proposition is that a meta-group of this scale does not just help government agencies make history. I hope to show that it, and its predecessors, are powerful enough to help make history themselves. However they do not do so overtly, but as a hidden Force X whose presence is not normally acknowledged in the polite discourse of academic political scientists. On the contrary, as we shall see, references to it are usually suppressed….”

More here in “The Global Drug Meta-Group: Drugs, Managed Violence, and the Russian 9-11,” Lobster Magazine. 10/29/05

Madoff Agrees to Partial Settlement with SEC

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“Bernard Madoff and the Securities and Exchange Commission have agreed to a partial settlement of civil suit accusing Madoff of defrauding investors.

According to an SEC press release, Madoff consented to a partial judgment without admitting or denying the civil charges against him. Although the amount in civil penalties that Madoff would have to pay has not yet been determined, the judgment states that the allegations against him have been established and cannot be contested at a later point….”

– report by Laurie Bennett, Feb. 9, 2009

More at Muckety.com

Ron Paul Revolution: END THE FED

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Statement by Congressman Ron Paul (US House of Reps)

 On Abolition of Federal Reserve Board Act

February 3, 2009

Madame Speaker, I rise to introduce legislation to restore financial stability to America’s economy by abolishing the Federal Reserve. Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people.
From the Great Depression, to the stagflation of the seventies, to the current economic crisis caused by the housing bubble, every economic downturn suffered by this country over the past century can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial “boom” followed by a recession or depression when the Fed-created bubble bursts.
With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.

Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of special interests and their own appetite for big government.

Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.

In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.

In conclusion, Mr. Speaker, I urge my colleagues to stand up for working Americans by putting an end
to the manipulation of the money supply which erodes Americans’ standard of living, enlarges big
government, and enriches well-connected elites, by cosponsoring my legislation to abolish the Federal
Reserve.

— Ron Paul’s Speeches and Statements

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Three High-Profile Suicides Related To Financial Losses In 6 Months

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I forgot to post this interesting news from earlier in the week (January 5, Monday) :

“The patriarch of a German family whose assets include a majority stake in HeidelbergCement died on Monday in an act his family attributed to “the desperate situation of his companies caused by the financial crisis”…….

Merckle’s situation echoes those of Olivant chief operating officer Kirk Stephenson and Access Partners’ Rene- Thierry Magon de la Villehuchet, both of whom committed suicide last year. All faced large, rapid financial losses. All were caught out by forces that may have been hard to accept. Merckle was a once-conservative industrialist seduced by the returns available through heavy leverage. Unable to refinance loans taken out to cover trading losses, including an estimated E400m from short-selling VW shares, he faced a very public liquidity crunch…”

More at The Telegraph

Comment:

The first of the suicides was by Kirk Stephenson, the New Zealand born COO of Olivant Advisors.

He apparently threw himself in front of a 100 MPH train at Taplow railway station in Berkshire while under increasing financial pressure from the credit crisis. Olivant is a private equity firm that tried to buy a 15% (1 million P ) stake in Northern Rock before the bank was was nationalized. Stephenson, 47, married and with an 8 year old son, was a well-respected millionaire City financier.

Merckle, 74, known as the German Warren Buffett and once the 92nd richest man in the world according to Forbes, was until the financial crisis worth $9.2 billion.  His holding company owed $6.7 billion to the banks when he was found dead on the tracks outside his home town of Blaubeuren. He left a suicide note behind.  Merckle expanded his grandfather’s pharmaceutical business from 80 employees to over 70,000 but seems to have run it like a family firm, giving employees as many as six years at home to raise children.  That might have been the reason he took his losses so personally. The last straw apparently came when his holding company shorted Volkswagon and the shares went on to quadruple.

The third suicide (which I posted earlier) was that of Rene-Thierry Magon de la Villehuchet, the French manager of Access International, one of the European “feeder funds” for Madoff. Villehuchet was found dead, his wrists and biceps slashed with box cutters, at his NY office, after losing clients over a billion (1.4 at least) dollars. That sum included his own money as well as the money of family and friends. Villehuchet was a French aristocrat whose ancestors made a fortune in shipping in the 17th century and the (apparent) suicide is attributed to the loss of honor and reputation he suffered. Villehuchet did not leave behind a suicide note. Villehuchet’s brother insisted that the return he and others received from the Madoff fund  (which he described as 17 percent distributed over  4 years) was far from excessive. He also insisted that his brother was a modest and honorable man, not a greedy socialite, as he was being portrayed in the media. However, it does look like Villehuchet used excessive leverage (150 percent) that left him with losses greater than his investment.

Item: There was no suicide note in the Villehuchet case.

Item: Villehuchet lived in Westchester County in New York and worked in New York city.

Item: Villehuchet co-founded Access International Advisors with Patrick Littaye in 1994. Littaye had been investing with Madoff for a while. It was Littaye who brought Villehuchet into Madoff’s ambit. Access raised funds in Europe to invest with Madoff (75% of it was with him) through  LUXALPHA  SICAV-American Selection, a fund managed by the bank, UBS. Its objective was “to provide a consistent performance” for investors, who included the Rothschilds and Liliane Bettencourt.

Item: Prior to founding Access, Villehuchet was CEO and Chairman of Credit Lyonnaise Securities, the US Investment Banking arm of the French bank, and prior to joining there in 1987, he ran Interfinance, a broker firm specializing in the European markets that he founded in 1983. Before that, he worked at Banque Paribas from 1970 and it was then he met Littaye who worked there too.

Item: He was working closely with American financiers from at least 1987, from this account. Twenty years of living in New York where most top fund managers were reportedly aware that something was not right with Madoff, and he didn’t know? Shouldn’t he at least have diversified? Instead, one report says he actually put all of his brother’s money into the fund and 20 % of his own (another report reverses the figures). That sounds as if he knew enough about Madoff to be absolutely sure about the deal. How could he so sure? Could he have been  oblivious to the complaints going on from 1999 and earlier?

Not likely. In fact, I would say impossible. Just as it’s impossible that the SEC was simply incompetent on this. As my previous post shows, the SEC was quite capable of rooting out Ponzi schemes of just this sort in several cases. Note the number of times (8) there were investigations into Madoff:

(1) 1992 – an SEC probe of Florida accountants who allegedly sold unregistered securities brings up Madoff’s name (2) 1999 -SEC examiners review trading practices at Madoff’s investment advisory firm (3) 2001 – The SEC’s Boston office notified by Harry Markopolos about questionably stable returns of Madoff’s firm (4) 2004 – SEC investigates Madoff for improper trading practices (5) 2005 -SEC interviews Madoff and family and finds no improper trading practices (6) 2005 – industry-based regulatory office finds no improper trading practices by Madoff’s firm (6) 2005 – SEC investigators meet Markopolos, who calls Madoff’s firm  “the world’s largest Ponzi scheme” (7) 2006 – SEC enforcement investigation says Madoff and a client misled regulators and Madoff agrees to register as an investment adviser (8) 2007 -Financial Industry Regulatory Authority examines Madoff’s firm but takes no action.

No. Someone with oversight of the SEC squashed the investigation.

And Villehuchet, whatever his personal sense of honor, very likely knew what Madoff was all about.

Why Didn’t The SEC Act In 2006?

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More questions about the SEC’s role:

“Finding exactly when Madoff “turned Ponzi” will have important implications for the tsunami of lawsuits expected in the wake of his collapse, not least for the regulators.

If it was only in 2001 Madoff turned crook, then he was only operating for four years before the authorities received their first major warning something was amiss.

Because it was in November 2005 the Securities and Exchange Commission received a 21-page document entitled “The World’s Largest Hedge Fund is a Fraud“, which listed 21 “red flags” for believing Madoff was running a Ponzi scheme.

The author, financial fraud investigator Harry Markopoulos, had been trying to warn the SEC about Madoff for at least two years.

His document set out in detail why it was mathematically impossible for Madoff’s investment strategies to be producing the returns he claimed.

He also claimed every senior manager who understood derivative trading believed “Bernie Madoff was a fraud”, which explained why Madoff would not let feeder fund investors mention his firm’s name in their performance summaries or marketing literature.

“Madoff does not allow outside performance audits,” Mr Markopoulos wrote.

“One London-based hedge fund, fund of funds, representing Arab money, asked to send in a team of accountants to conduct a performance audit during their planned due diligence.

“They were told ‘No, only Madoff’s brother-in-law who owns his own accounting firm is allowed to audit performance’.”

What happened next is the subject of a Congressional investigation……

The SEC’s inaction has fuelled suspicion Madoff had friends in Washington who might have pressured regulators to lay off.According to the Center for Responsive Politics, Madoff, his companies and his wife, Ruth, have spent almost $1.4 million on donations and lobbyists since 1991….”

More at The Herald Sun.

Comment:

The SEC investigated Madoff 8 times over 16 years and still didn’t manage to catch the fraud. Meanwhile, Meaghan Cheung, who, as the SEC’s NY branch chief in 2006, looked at Madoff’s books and gave him a clean bill of health, shrugged off blame. She said she couldn’t be faulted for not knowing the books were false. Markopolous has suggested she didn’t have the mathematical background to understand what was wrong.

So, after Markopolous had alleged that Madoff was running the world’s largest Ponzi scheme, three SEC staffers authorized the January 2006 enforcement case: Cheung, attorney Simona Suh, and Assistant Director Doria Bachenheimer.  After interviewing Fairfield Group, the NJ feeder fund involved, they closed the case, finding no fraud, in November 2007.  The SEC didn’t respond in 2008 when Markopolous tried to reopen the issue.

It’s interesting  that the case was assigned to three female staffers, who seem to be mid-level management. Especially after Markopolous’ very persuasive charges and a whole litany of complaints for years. That smacks of forethought. It’s often the case that women or minorities or people at the middle-level are brought into an investigation as future scapegoats, who can conveniently be rubbished as incompetent should the need arise.That allows for legal claims to be framed against the government.

Is that what happened here?

Otherwise, a matter like this would normally be the fault of the investment advisers who failed to do due diligence and to properly diversify their clients’ assets.

Madoff & Co. – How The SEC Tackled Other Scams

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The SEC is going after the small fry, now that’s it’s been caught with its pants down in the case of the biggest fry of them all.

A Philadelphia investment manager, Joseph Forte, has been charged with having swindled around $50 million from 80 investors in a mini Madoff scheme.

It’s not the only such case in the SEC’s files. The Commission just closed up a civil case against Renaissance Asset Fund, Inc.’s  Ronald J. Nadel, and Joseph M. Malone, which charged them with swindling over $16 million from more than 190 investors nationwide, most elderly and belonging to Jehovah’s Witnesses congregations.

“According to the complaint, from at least March 1999 through April 2004, the defendants raised funds for multiple purported projects, including a general fund, an outlet mall, an international currency exchange, and a Swiss bank. Some of the purported projects did not exist, and others were unsuccessful. The defendants misrepresented to investors that their investments would earn returns ranging from 10% to 25% in as little as four months. The defendants also sent quarterly account statements to investors setting forth the fictitious profits their investments had purportedly earned. Based on the representations in these account statements, many investors reinvested their principal and purported profits in other Renaissance projects.

The defendants operated Renaissance’s programs as a Ponzi scheme, paying earlier investors with funds raised from later investors. Nadel also used investor funds to pay for lavish expenses, including country club memberships, car leases, and retail purchases. The majority of investors in Renaissance never received the interest or return of their principal the defendants had promised. …”

Read more at Jehovah’s Witness.Net. Here’s the link to the original SEC complaint in 2006 and here’s the record of the SEC’s administrative proceeding (January, 2008) barring Nadel from selling securities for 5 years.

Comment:

I am posting material that creates a context for the Madoff business. Florida is one place to start because the state is notorious for attracting scamsters lured by its population of wealthy seniors. Reports like the ones I’ve posted show that while the SEC sat on its hands during the Madoff scam, it was doing its job when it came to the smaller fry. In other words, it isn’t the lack of laws or regulation that is the problem. It’s the selective enforcement of laws. And that’s a problem not of structure, as the liberals would have it, but of political culture and corruption.

Supporting that take, here’s another, older piece (1992), “An Oasis Rich in Shady Operators,” Diana Henriques, NY Times, October 4, 1992 which describes scams in the booming 1990s, supposedly the golden age of the markets.

“College Bound is not unique in Boca Raton. Indeed, in the past year, this expensive enclave has experienced the financial equivalent of a cancer cluster. Six local corporations, including College Bound, have fallen under S.E.C. investigation; a seventh has been shut down and its chairman arrested and accused of running a Ponzi scheme. Dozens of other companies based here are little more than corporate shells created by boiler-room brokers, or financially flimsy companies whose chief products seem to be their own stock and news releases boasting of their prospects.

Regulators policing the penny stock market refer to the area’s unsavory brokers as the Boca Bunch, and state investigators have dubbed the area “the Maggot Mile.” The United States Attorney’s satellite office next door in West Palm Beach, once a three-person operation, now keeps 14 attorneys busy. ‘Very Appealing Location’

“Once it was North Miami that had become notorious, then Fort Lauderdale,” said Caroline Heck, executive assistant United States Attorney in Miami. “Now, Boca is a very appealing location.”

Charles A. Harper, the regional administrator for the Miami office of the S.E.C., agrees. “We’ve definitely seen problems moving up the coast.”

And this excerpt below (also from the same Times piece) shows that money-laundering often accompanied the fraud:

“According to court records in Miami, the Bank of Credit and Commerce International, which has since emerged as one of the largest bank frauds in history, opened a branch here just to cater to Munther Ismael Bilbeisi, a Jordanian businessman and Boca Raton resident indicted in August 1991 on tax evasion charges stemming from a coffee-smuggling scheme financed by B.C.C.I. Mr. Bilbeisi left Boca a fugitive.

Cary Maultasch, who testified under a grant of immunity against Michael R. Milken in 1990, still lives here, as do other former Wall Street lions from the scandals of the 1980’s, including Martin A. Siegel, who pleaded guilty to insider trading charges involving Ivan F. Boesky.”

Drugs often played a role in many suspect firms, as this piece from Sept, 08, indicates:

“In 1987, Jerold Weinger was the CEO of a Wall Street brokerage firm crushed under an avalanche of coke.

One of the firm’s partners, six brokers and a receptionist were arrested in a massive U.S. Drug Enforcement Administration Wall Street sweep called Operation Closing Bell. A ninth employee was arrested in the firm’s Florida office. Partner Wayne Robbins ultimately pleaded guilty to drug charges, and seven of the eight others either pleaded or were found guilty of possession, distribution or conspiracy to distribute cocaine, according to the DEA’s New York office.

According to federal court documents filed in the Southern District of New York, brokers at Brooks, Weinger, Robbins & Leeds regularly traded stock tips for cocaine. In one instance, a broker gave cocaine to a principal of another company in exchange for $10,000 worth of stock in that company’s initial public offering. At one point during the sting, a broker was arrested on drug charges and fired from the firm. A day later, he was rehired “because he was a good, trusted source of cocaine.” (“ Fool’s Gold: Desperate clients hand over thousands of dollars for a chance at a job,” Craig Malisow)

Dow Jones NewsWire On Sentier 2

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Just to make sure this news report doesn’t vanish into the murky depths of Google, I’ve posted it below in toto.

http://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/200812111307DOWJONESDJONLINE000860_univ.xml

(downloaded, 12:40 PM January 9, 2009)

Note that the report is dated 12-11-08. Madoff was arrested on Dec 11 (Thursday).

SocGen, Barclays Cleared Over Franco-Israeli Money Laundering12-11-08 1:07 PM ESTPARIS (AFP)–A Paris court Thursday cleared the banks Societe Generale SA ( 13080.FR) and Barclays PLC (BCS) of complicity in money-laundering between France and Israel, but convicted a top Pakistani bank and a U.K.-owned lender.

The court also sentenced a former French prosecutor to 20 months for corruption, and gave two executives from the National Bank of Pakistan (NBP.KA) two-year suspended jail terms following a mammoth trial. Judges heard how the four banks handled money from merchants in Paris’ Sentier garment district – the proceeds of tax evasion, embezzlement or stolen checks laundered through banks or money exchange offices in Israel.

The banks had all denied any wrongdoing in the case, dubbed “Sentier 2.”

A previous “Sentier” trial saw dozens of clothing merchants from the district convicted of defrauding banks, and investigators looked at whether the firms had made proper checks before handling the merchants’ payments.

One hundred and fifty-two people were on trial alongside Societe Generale, the French units of Barclays and of the National Bank of Pakistan, and Societe Marseillaise de Credit, owned by HSBC Holdings PLC (HSBA.LN).

Daniel Bouton, the chairman of Societe Generale – which was hit by a massive rogue trading scandal at the start of this year – was acquitted along with his bank and three other senior managers at the lender. They were accused of handling the equivalent of EUR32 million in ill-gotten funds.Investigators told the court that Societe Generale knew of the fraudulent origin of this money but the judge accepted defense arguments that there was no “intentional element” on the part of the bank.Bouton’s lawyer welcomed what he said was a “coherent” decision. Bouton had been charged with aggravated money laundering and faced 10 years in jail.Barclays-France and four of its former or current executives were also cleared of wrongdoing.The court fined the National Bank of Pakistan EUR200,000 and gave two-year suspended jail sentences to two of its bosses for failing to spot EUR1.8 million in illegal transfers.The pair were also fined EUR20,000 each. Two other executives from the NBP, one of the largest commercial banks in Pakistan, were acquitted.Societe Marseillaise de Credit was also convicted of failing to spot EUR1.8 million in illegal transfers and fined EUR100,000. One of its executives was given an eight-month suspended sentence.A former French prosecutor was convicted of for corruption and influence peddling and given a three-year jail sentence with 16 months of it suspended. He was fined EUR30,000.Click here to go to Dow Jones NewsPlus, a web front page of today’s most important business and market news, analysis and commentary: http:// www.djnewsplus.com/al?rnd=OBSC4tG5tv93CjIHwO9G9A%3D%3D. You can use this link on the day this article is published and the following day.