Ex-Credit Suisse adviser sentenced to five years for “clever fraud“

Geneva prosecutor Bertossa stands outside the courthouse after the verdict of the trial of Lescaudron a Credit Suisse banker in Geneva. (Reuters)
Updated 09 February 2018
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Ex-Credit Suisse adviser sentenced to five years for “clever fraud“

GENEVA: Former Credit Suisse client adviser Patrice Lescaudron was sentenced to five years imprisonment by a Geneva court on Friday for abusing the trust of clients and putting in place a fraudulent scheme that brought him tens of millions of francs.
Lescaudron appeared in court for the verdict wearing a grey fleece sweatshirt emblazoned with Ferrari, the name of the Italian sports car he was said to have purchased with money he amassed.
Judge Alexandra Banna said the ex-banker was guilty of fraud in his handling of former clients, including former Georgia Prime Minister Bidzina Ivanishvili and Russian oligarch Vitaly Malkin. She said he had caused losses totalling 143 million Swiss francs ($152 million) and made personal gains of 30 million francs.
The adviser had “fooled the bank and the client” through a “clever fraud” in which he “copy-pasted signatures on documents so as to falsify transfer orders,” Banna said.
Lawyers for Ivanishvili have said that fraudulent activities by the adviser lost the former Georgian leader hundreds of millions of dollars.
Zurich-based Credit Suisse has said the former adviser violated internal rules and Swiss law and worked to conceal these actions from the bank.
“The former relationship manager demonstrated a high degree of criminal energy, violating internal controls and rules as well as Swiss law and concealing his criminal activities from Credit Suisse colleagues,” the bank said in January.
“Two years of criminal investigation have not revealed any indication that the former relationship manager was helped with his criminal actions by other Credit Suisse employees.”
Representatives for Ivanishvili argued the adviser was not a lone wolf, however, saying senior management had knowledge of his activity and that the bank did not take action but instead continued to charge commission payments on the products sold.
Ivanishvili’s complaints relate to the handling of portfolios between 2005 and 2015, when it is alleged money was stolen and substantial losses resulted from unauthorized investments.
Prosecutor Yves Bertossa on Friday told reporters he would not comment on the bank’s role in the matter because it was the subject of a parallel procedure.
Lescaudron’s sentence matched what prosecutors had sought.
Lescaudron amassed a personal wealth of 32 million francs, including houses in Switzerland and the Italian seaside resort of Porto Cervo, and a Picasso lithograph, said to be missing.
His total assets, including the Ferrari and jewels that had been “financed with ... commissions” said to be the product of his crimes, were seized among items listed in a seven-page sequestration.
He was orderd to make repayments totalling more than $130 million.
The Porto Cervo house was also seized, but the Lescaudrons were allowed to keep their family home in Arzier, Switzerland.
Lescaudron has already spent two years in pre-trial detention, where he was noted for exhibiting “exemplary behavior,” the court had said.
“The sentence is very harsh,” Lescaudron’s lawyer Simon Ntah said. “But it leaves a bit of hope, it allows him to have a perspective.” Ntah added he hoped the sentence would be commuted for good behavior so Lescaudron could be released in 2019.
Lescaudron sat passively throughout the reading, stood for the verdict and was escorted back to prison at the end.


Nasdaq Dubai to launch Saudi Arabian futures later this year

Updated 20 May 2018
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Nasdaq Dubai to launch Saudi Arabian futures later this year

  • The move will allow global investors to trade shares in Saudi Arabian listed companies via contracts to buy or sell shares at a set price in the future
  • The Kingdom’s stock exchange, the Tadawul, has announced its intention to enable futures and other derivatives trading

DUBAI: Nasdaq Dubai, the UAE’s international stock exchange, is to launch futures trading in Saudi Arabian quoted companies before the end of this year, Arab News can reveal.
The move will allow global investors to trade shares in Saudi Arabian listed companies via contracts to buy or sell shares at a set price in the future, and is expected to add to the attraction of the Kingdom’s financial markets among international investors. 
It will be the first time Saudi stocks can be traded in derivative form.
Hamed Ali, chief executive of the Dubai-based exchange, said: “We are delighted to provide investors with an exciting new route to gain exposure to the Kingdom’s dynamic and rapidly expanding equity markets. What we’ve seen happen in Saudi Arabia is impressive reform, progression and change, and there is a lot of regional and international interest in the stock markets there. 
“This is good news for our two markets, and a good step in building a stronger bridge between them,” he added.
Ali has been involved in talks about the initiative for some time with relevant market players in the Kingdom. 
“The framework we have built for trading and clearing Saudi futures is based on intensive consultations with regional and international market participants, including brokers and potential 
investors.  Our futures will provide further 
impetus to invest in Saudi Arabian capital markets and help develop new links with market participants,” he added.
The Kingdom’s stock exchange, the Tadawul, has announced its intention to enable futures and other derivatives trading, but its plans are still thought to be some way from implementation. Earlier this month it announced the setting up of an independent clearing house, essential to pave the way for derivatives trades.
The launch of futures by Nasdaq Dubai comes at a busy time for markets in the Kingdom. The Tadawul’s headline TASI index is among the best performing in the world, having risen 11 percent so far this year. 
Index provider MSCI is widely expected to include KSA stocks in its widely tracked emerging markets index from next year, opening the bourse up to significant inflows from foreign investors. 
Such investors are also eagerly waiting for a raft of domestic privatizations that could further boost the markets later this year and beyond. 
The most eagerly anticipated is the initial public offering (IPO) of a minority stake in oil major Saudi Aramco, which could be the biggest IPO in history. Asked about the listing, Ali said: “We would definitely offer single stock futures in it.”
Nasdaq’s Saudi futures market will commence in the third quarter of the current year, offering contracts on some of the Kingdom’s biggest stocks by market capitalization and liquidity, including some of the Middle East’s largest businesses active in sectors such as petrochemicals, real estate, banking and transport.
The futures contracts will give investors new hedging tools to take long and short positions on the companies, at a time when international investor interest in the Kingdom’s stock market is increasing rapidly, Nasdaq believes.
The Nasdaq futures market currently operates with leading Gulf brokerages as members, and two active market makers on the UAE contracts.

 

More market participants are preparing to join as Nasdaq Dubai adds the KSA single stock futures and expands its 
derivatives platform in phases, to include futures based on stocks and indices of various exchanges in the Middle East and North Africa, as well as options, Nasdaq said. More brokers are expected to join the Nasdaq platform as the trade in Saudi futures takes off, including some from Saudi Arabia.
Nasdaq Dubai launched UAE futures trading in 2016 with single stock futures on seven UAE-listed companies. That number has since increased to 17 and last February the exchange added futures on Dubai Financial Market’s DFMGI share index, as well as the ADSMI index of Abu Dhabi Securities Exchange. Futures on MSCI’s UAE index will be added soon under a license agreement signed with MSCI.
“We are really pleased with the futures market performance. Volumes have been steady, but, of course, they just reflect the underlying performance of the market,” Ali said.
Futures and other derivative products are common instruments in Western and other financial markets, and are regarded as key mechanisms to enhance market 
liquidity, but have been slower to gain 
acceptance in the Middle East.  
The futures move by Nasdaq Dubai is a sign of increasing co-operation between the UAE and Saudi stock exchanges, as well as others in the Gulf Co-operation Council region.
Sarah Al-Suhaimi, chairperson of the Tadawul, said recently that she wanted to make the Tadawul the “dominant” exchange in the region, and that discussions had taken place between exchange policymakers and regulators with a view to enabling common listing rules and dual listings of regional companies.
“Can there be other things we can do 
together with Riyadh? Yes, of course, there are lots of things, but we need to agree a framework,” Ali said.
“We will be looking at more products in the future. This is just a starting point,” he added.

Decoder

Futures Contracts

Futures contracts allow investors to buy shares (or other assets) at an agreed price for delivery (and payment) at a later date. They are a common tool used to hedge risk, by limiting exposure to price fluctuations.