Jump to content
House Price Crash Forum
Sign in to follow this  
Sancho Panza

Bailed-Out RBS Systemically Forged Customer Signatures: Whistle-Blowers

Recommended Posts

Wolf Street 6/2/18

'The Royal Bank of Scotland, the UK mega-lender that has already cost British taxpayers over £90 billion in bailouts, losses, fines and legal fees, could be about to face its biggest scandal yet following allegations staff were routinely “trained” to forge customer signatures.

First, managers were taught how to fake the names on key customer documents, according to whistle-blowers at the bank, cited by the Scottish Mail on Sunday. Staff were then allegedly shown how to download authentic signatures from the bank’s online system, trace them on to new documents by holding them against a window and to photocopy the paperwork a number of times, to “obscure the image somewhat” and thus avoid detection — a blatantly criminal practice that allegedly became commonplace throughout the bank to speed up processing.

The latest allegations are further confirmation of just how poisoned a legacy the pre-crisis management team left behind at the bank. Obsessed with achieving rapid growth at just about any cost, executives “bred a culture of impunity that affected most aspects of [RBS’] business,” says British financial journalist Ian Fraser.

Fraser was one of the first journalists to expose how some of the bank’s employees edited minutes of telephone conversations with customers to avoid the bank having to shell out compensation for misselling insurance products. At one point as many as 1,000 employees at RBS’s investment banking division (nearly a tenth of its back-office staff) were solely engaged in data-clean up and reconciliation — i.e., doctoring or recreating documents, such as loan and derivatives contracts, in ways that suited the bank and often undermined the position of counterparties.

It was small business customers that suffered most at RBS’ hands. The bank’s Global Restructuring Group, which was supposed to help turn compromised business customers around, did everything it could to push them over the edge in order to raise quick funds during the financial crisis. Two weeks ago, a government inquiry into the scandal published a tip sheet written by a GRG manager that included points such as “Rope: sometimes you just have to let customers hang themselves.”

The GRC deliberately “knee-capped” business customers they didn’t particularly like, through various techniques such as phony valuations or misselling them deadly interest rate swaps, so that the bank could pretend they were in breach of conduct, says Fraser. Then, as a favor to a larger company it valued much more, the group would sell it the smaller company or its remaining assets at a discount and pocket the change. In this manner the group is alleged to have wiped out thousands of smaller companies at the height of the financial crisis.

Top executives at the bank say they will “no longer fight” the conclusions and recommendations of the government’s “withering” independent review of mistreatment of small business customers by the bank, the FT reports today. In other words, the senior bankers finally admit that the bank defrauded its small business customers.

For the moment the same executives deny any systemic document tampering. But if irrefutable evidence emerges, they may be forced to walk back those denials, too. And a fresh new round of legal action can begin.

The latest allegations of fraud could turn out to be the tip of a very large and dangerous iceberg, Fraser warns. If the practice of forging signatures was as widespread as the whistle-blowers contend, there’s a risk, albeit small, that a court will decree all contracts between RBS and its customers null and void, which could tip the lender over the edge. Such an outcome may seem preposterous, but so too was the notion that a high street bank would systematically forge its customers’ signatures. Until today.

Arguably the biggest tragedy in all of this, besides all the small businesses wiped out by the bankers’ greed, is that the worse the RBS saga gets, the more expensive it becomes for British taxpayers, almost none of whom had anything to do with the bank’s fraudulent practices. Some taxpayers were even victims of the fraud yet still have to help fund the bank’s continued survival, which is getting more and more costly as time goes on.

The British State owns 81% of RBS. Since receiving a £45 billion bailout 10 years ago, at the very beginning of the financial crisis, the bank has racked up further losses of £58 billion. With taxpayers owning an 81% stake, their part of the losses amount to £47 billion — meaning that the total cost of its disastrous lending, over-paying for takeovers, fines and legal bills actually tops £90 billion. With little sign of RBS turning an annual profit any time soon, the accumulated losses are expected to continue to grow while doubts still remain about just how accurately RBS prices its assets.

RBS’ ongoing trials and tribulations are a stark reminder of just how little road has been traveled since the last financial crisis and how deeply vulnerable the UK’s banking system — and with it, the broader economy — remains to another downturn, just at a time that the potential warning signs of another crisis are beginning to flash. By Don Quijones.'

 

 

Thankfully we were saved from RBS collapsing.Heaven knows what damage might have been done to the lives of ordinary people if they'd been left to fold.

Edited by Sancho Panza

Share this post


Link to post
Share on other sites

Don't worry though. No matter what evidence surfaces absolutely no one will go to jail.

I think we need to stop calling it the Great Financial Crisis and start calling it the Worst Bailout Ever.

 

Share this post


Link to post
Share on other sites
6 hours ago, Parkwell said:

Don't worry though. No matter what evidence surfaces absolutely no one will go to jail.

I think we need to stop calling it the Great Financial Crisis and start calling it the Worst Bailout Ever.

 

GFC

Greatest Financial Crime

Share this post


Link to post
Share on other sites
6 hours ago, Parkwell said:

Don't worry though. No matter what evidence surfaces absolutely no one will go to jail.

I think we need to stop calling it the Great Financial Crisis and start calling it the Worst Bailout Ever.

 

But everything's fine. The BoE are being vigilant.

Share this post


Link to post
Share on other sites

This is far worse, Robosigning is a failure to follow due process, forging customers signatures is fraud and theft. Which is why I doubt it is as common as suggested - few people of any persuasion would commit a crime to benifit their employer.  

Share this post


Link to post
Share on other sites

Yes, it does seem worse. Although the notary fraud in the US example was quite bad -  i.e. accusations of notary fraud wherein the notaries pre- and/or post-notarize the affidavits and signatures of so-called robo-signers.

The whole thing is just a farce and needs to be investigated thoroughly.

Edited by Errol

Share this post


Link to post
Share on other sites
12 minutes ago, Errol said:

Yes, it does seem worse. Although the notary fraud in the US example was quite bad -  i.e. accusations of notary fraud wherein the notaries pre- and/or post-notarize the affidavits and signatures of so-called robo-signers.

The whole thing is just a farce and needs to be investigated thoroughly.

"Lessons will be learned..."

Share this post


Link to post
Share on other sites
17 hours ago, Sancho Panza said:

At one point as many as 1,000 employees at RBS’s investment banking division (nearly a tenth of its back-office staff) were solely engaged in data-clean up and reconciliation — i.e., doctoring or recreating documents, such as loan and derivatives contracts, in ways that suited the bank and often undermined the position of counterparties

I worked for RBS around this time. There isn't a chance in hell that 1000 people were paid to forge customers signatures. That said it's not inconcievable a small team could have been at it. 

It is hard to believe that senior management weren't aware of some of these practices. I recall staff complaining when the libor fixing scandal broke - how can senior managers not know people were fixing the libor rates while I can't order a new mouse for my pc without getting 9 managers to authorise it....or get access to a computer system without having as many as 15 managers authorise it. 

Share this post


Link to post
Share on other sites
2 hours ago, regprentice said:

I worked for RBS around this time. There isn't a chance in hell that 1000 people were paid to forge customers signatures. That said it's not inconcievable a small team could have been at it. 

It is hard to believe that senior management weren't aware of some of these practices. I recall staff complaining when the libor fixing scandal broke - how can senior managers not know people were fixing the libor rates while I can't order a new mouse for my pc without getting 9 managers to authorise it....or get access to a computer system without having as many as 15 managers authorise it. 

It does seem an ambitious claim .However,it's worth noting that apparently the bank isn't contesting the allegations.

For me the more significant allegaton relates to the way SME's were missold interest rate swaps and other products, only to see their businesses taken off their hands.

Share this post


Link to post
Share on other sites
29 minutes ago, Sancho Panza said:

It does seem an ambitious claim .However,it's worth noting that apparently the bank isn't contesting the allegations.

For me the more significant allegaton relates to the way SME's were missold interest rate swaps and other products, only to see their businesses taken off their hands.

RBS try to tie up all outstanding issues so they can state they are closed in their annual financial statements which will be issued on the 27th of this month. 

I think the statement that RBS aren't contesting the Govts independent review is to try and agree a settlement and close the issue before the 27th. I don't think it extends to these specific claims around forgery printed in the Mail on Sunday at the weekend. .

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 406 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.