‘Repo 105′ at the heart of Lehman report

By Sean Farrell

Published: 8:11PM GMT 12 Mar 2010

Mr Valukas finds what he calls “colorable claims” that could support
a court decision against the former executives and the accountancy firm.

At the heart of his findings is “Repo 105″, an accounting ruse that
was instead used to try and keep the bank alive.

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Markets must be able to punish Lord Myners says

By Angela Monaghan

Published: 5:30AM GMT 09 Mar 2010

The Financial Services Secretary said the concept was a key part of the
Government’s plans to reform the banking system in the wake of the financial
crisis, and that without such a move, it would be impossible to restore true
market discipline.

“A lot of people lost money in the financial sector over the last few
years – bank shareholders in particular suffered massive losses. But many
people have been protected. Creditors have been bailed out. Far too many
bankers themselves have enjoyed massive awards during the crisis, even as
their firms were rescued,” he said.

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Spanish police arrest ringleaders who infected 13m PCs with credit-card stealing virus

By
Daily Mail Reporter
Last updated at 6:58 PM on 03rd March 2010

Spanish police have arrested three men accused of masterminding one of the biggest computer crimes to date, which created a network of 13million virus-infected computers. The virus, named the Mariposa botnet, stole credit card numbers and other personal details from infected machines.
The virus was used to steal login credentials and record every key stroke on the 13m infected computers
Mariposa had infected machines in 190 countries in homes, government agencies, schools, more than half of the world’s 1,000 largest companies and at least 40 big financial institutions.’It was so nasty, we thought “We have to turn this off. We have to cut off the head,”‘ said Chris Davis, CEO of Defence Intelligence Inc, which discovered the virus last year.Defence Intelligence along with the Spanish firm Panda Security did not say how much money the hackers had stolen from their victims before the ring was shut down two days before Christmas last year.

Security experts said the cost of removing malicious program from 13 million machines could run into tens of millions of pounds.Mariposa was programmed to secretly take control of infected machines, recruiting them as ’slaves’ in an army known as a ‘botnet.’ It would steal login credentials and record every key stroke on an infected computer and send the data to a ‘command and control centre,’ where the ringleaders stored it.’Basically they were going after anything that would make them money,’ Mr Davis said.WHAT IS A BOTNET?A botnet is a network of computers that have been compromised by a virus or worm sent over the internet.They are controlled by a single command centre and can be used to steal personal data and send viruses on to other computers.The hacker can sell or hire out the botnet to criminals who can use the details for cybercrimes such as fraud and spamming.
Mariposa initially spread by exploiting a vulnerability in Microsoft Corp’s Internet Explorer Web browser. It also contaminated machines by infecting USB memory sticks and by sending out tainted links using Microsoft’s MSN instant messaging software, he said.A Microsoft spokeswoman said the company did not immediately have any comment.The suspected ringleader, nicknamed “Netkairo” and “hamlet1917,” was arrested last month, as were two alleged partners, “Ostiator” and “Johnyloleante,” according to Panda Security.Panda Security Senior Research Advisor Pedro Bustamante said that one of the three was caught with 800,000 personal credentials when Spanish police arrested him.In addition to collecting data, the three men rented out millions of enslaved machines to other hackers, according to Bustamante.The Mariposa botnet is one of many such networks, the bulk of which are controlled by syndicates that authorities believe are based in eastern Europe, southeast Asia, China and Latin America. While authorities sometimes succeed in shutting them down, they rarely catch the criminals behind the networks.’Mariposa’s the biggest ever to be shut down, but this is only the tip of the iceberg. These things come up constantly,’ said Mark Rasch, former head of the U.S. Department of Justice computer crimes unit.He said he suspects there were more than three people behind Mariposa, and that any ringleaders who were not arrested could soon put the network back online. 

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Wall Street watchdog Sheila Bair blasts ’shameful’ bonuses

By James Quinn, US Business Editor


Published: 7:24PM GMT 03 Mar 2010

Sheila Bair, head of the Federal Deposit Insurance Corporation (FDIC), said
that she wished America’s largest financial institutions had a better “proprietary
compass” as she lambasted the New York financiers on compensation.

“I would hang my head in shame to get paid a lot of money when my bank
did not do well,” said Ms Bair, whose regulatory body runs the
industry-backed lifeboat that refund depositors when banks collapse.

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Iran’s Bank Mellat wins ruling over Treasury

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Published: 3:47PM GMT 24 Feb 2010

The bank is fighting to overturn a Treasury order stopping all financial
companies doing business with it. The Treasury acted “to hamper Iran’s
nuclear and ballistic missile programmes” by shutting out Bank Mellat from
the financial sector.

Mr Justice Mitting, sitting in London, declared on Wednesday that, in its
legal battle with the Treasury, the bank was entitled under the European
Convention on Human Rights to be treated in the same way as an individual
terror suspect challenging a control order.

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Tories plan bank shares sell-off

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The public could be offered discounted shares in state-owned banks under a “people’s bonus” plan outlined by Tory shadow chancellor George Osborne.In a Sunday Times interview, Mr Osborne said the measure would be a reward for the £850bn of public money used to prop up failing financial institutions. Young people and those on low incomes would be offered extra discounts. Labour called the plan an “expensive political gimmick”, while the Lib Dems said it was an attempt to buy votes. Mr Osborne told the Sunday Times: “The bankers have had their bonuses. We want a people’s bank bonus for the people’s money that was put into these organisations.” It was expected people would be offered shares worth between a few hundred and few thousand pounds at a discount on the market price, the paper reported. There could be extra discounts for young people, low-income families and parents saving for their children. ‘Saving culture’”The man who would be chancellor wants a new generation of mass share ownership,” said BBC business correspondent Joe Lynam. “And he wants to create a new culture of saving rather than borrowing.” Mr Osborne said the share offer would only be made when the banks were properly regulated and could not take the kinds of risks that preceded the recession. The financial crisis saw the government nationalise Northern Rock, and take stakes in Royal Bank of Scotland (RBS) and Lloyds Banking Group.

Chief Secretary to the Treasury Liam Byrne said: “When it comes to the shares in the banks the public expect us to focus on getting their money back. “That means selling them at a time and way that maximises their value, not an irresponsible and expensive political gimmick.” RBS and Lloyds shares are currently worth about a third of the prices paid by the government. Liberal Democrat Treasury spokesman Vince Cable said that it was expected to be several years before the banks could be sold off, so “dangling this prospect” was “electioneering at its most cynical”. “These banks should be set the concrete objective of ensuring lending to sound small and medium-sized businesses who are the drivers of our economic recovery,” he said. “Actively encouraging people on very low incomes to invest in a volatile share market beggars belief and shows just how removed the Tories are from everyday reality. “A young couple on low income is more concerned with putting food on the table than speculating on the stock market.”

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Bank insurance levy gets backing

An insurance levy on financial institutions to help bail out banks in any future financial crisis has been backed at the World Economic Forum.Politicians and bankers have expressed support for the idea, while the International Monetary Fund (IMF) has described it as “practical”. The levy would go into a fund which could be used to bail out the banks instead of taxpayer money. Governments across the world have spent billions of dollars saving banks. ‘Rescue fund’The insurance levy is seen by many as a more realistic option than a tax on financial transactions, often referred to as a “Tobin Tax”, which has been discussed but has proved unpopular in some quarters. The tax has been proposed by the UK and France, but has garnered less support in the US. The insurance levy is seen as a more workable solution, not least because it has been backed by some leading bankers. Josef Ackermann, chief executive of Deutsche Bank, has advocated what he called “a European rescue and resolution fund”, while Barclays head Bob Diamond has supported the idea of a global levy. The leader of the opposition in the UK, David Cameron, has also backed the proposals. “We would work for a new international levy on banks to protect the taxpayer from footing the bill for banking crises,” he said during a speech in Davos. ‘Defining risk’Such a levy is one of a number of options being outlined by the IMF that will be presented to G20 ministers in April. However, working out the details of such a scheme could prove difficult, said the IMF’s deputy managing director John Lipsky. “You need some sense of how to define the risk you’re trying to insure,” he said. The US government has already proposed a tax on big banks to try and recoup some of the taxpayers’ money spent through its $700bn (£440bn) bail-out programme. Governments across the world are also trying to push through changes to banking regulation to try and prevent future financial crises happening in the first place. Earlier this month, US President Barack Obama outlined far-reaching reforms of the banking sector, including limits on the size of banks and restrictions of some risky trading practices.

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World markets hit by Obama bank crackdown

Markets in the UK and across Asia tumbled today in the wake of President
Barack Obama’s pledge last night to wage war on American banks in the
biggest regulatory crackdown on financial institutions since the 1930s.

London’s FTSE 100 index of leading shares opened 20.8 points lower at
5,335.10, before bouncing back slightly, up 3.4 points to 5,338.61.

Yesterday, London fell 85.70 points following the announcement of a sweeping
series of measures aimed at curbing the behaviour of banks and clamping down
on risky deals.

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Citigroup cuts compensation by 20% as losses fall

Citigroup, once America’s largest bank by asset value, has cut the
compensation pool for its bankers by 20 per cent despite narrowing its
losses for 2009 after repaying the final instalment of a $20 billion loan to
the US Government.

The bank announced that losses for the final three months of last year had
fallen to $7.6 billion, shrinking from $17.3 billion in the fourth quarter
of 2008. Over 2009, losses fell to $1.6 billion compared with $27.6 billion
in the previous 12 months that included the collapse of Lehman Brothers, the
rival US investment bank.

Citigroup has cut its full-year compensation pool by 20 per cent to $24.9
billion, down from $31 billion in 2008. Last year’s pool included a $6.25
billion contribution from the fourth quarter, which was flat on the
fourth-quarter contribution in 2008.

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Citigroup cuts compensation by 20% as losses fall

Citigroup, once America’s largest bank by asset value, has cut the
compensation pool for its bankers by 20 per cent despite narrowing its
losses for 2009 after repaying the final instalment of a $20 billion loan to
the US Government.

The bank announced that losses for the final three months of last year had
fallen to $7.6 billion, shrinking from $17.3 billion in the fourth quarter
of 2008. Over 2009, losses fell to $1.6 billion compared with $27.6 billion
in the previous 12 months that included the collapse of Lehman Brothers, the
rival US investment bank.

Citigroup has cut its full-year compensation pool by 20 per cent to $24.9
billion, down from $31 billion in 2008. Last year’s pool included a $6.25
billion contribution from the fourth quarter, which was flat on the
fourth-quarter contribution in 2008.

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