Category Archives: Diplomats

When justice is delayed too long the Devil is dancing.

It’s very hard to write a rational, unemotional blog about the state of our financial system when I’ve just been to see a friend, who is a victim of bank fraud, who has been waiting for justice for over 10 years, and who is now dying of terminal cancer. But I’m going to try because too many people now are dying without ever seeing justice done. Perhaps just as bad, those they leave behind see little benefit to justice in the future because no amount of money or even bankers being jailed, can never bring back someone you love. There are some things money can’t buy.

I should add straight away that I’m not saying a bank caused my friend’s cancer – it didn’t. But years of stress, anguish, eviction hearings and trying to make ends meet will not have helped the situation. I’m not a doctor but it seems logical to me that the energy and willpower you need to try and fight of an evil disease like cancer and which should be your primary concern, is not aided when you have bailiffs at the door and a banks top lawyers trying to grind your chances of justice into the ground with legal technicalities and the ever promoted ‘costs’ threat.

That is a reality. When victims of bank misconduct are put with their backs against the wall, no one in authority says “hang on a minute, there’s a reason they can’t pay their Council tax or their bills”, they just go for the throat – which is why we have obscene programmes like ‘Can’t Pay We’ll Take It Away.” Bankers on the other hand, faced with serious allegations that may see them facing fines or, God forbid, criminal charges, can rely on their fail safe – money. Shareholders money (in some cases tax payers money) to bail them out of difficult situations.

It’s only a month since the wife of one of the SME Alliance members died of a heart attack – and in that case I suspect the conduct of a bank was the root cause. When that happened it reminded me of an article I found years ago which was written as a result of research by Cambridge University academics, entitled “Can a Bank Crisis Break Your Heart?”: http://www.cam.ac.uk/news/can-a-bank-crisis-break-your-heart

Obviously a bank crisis and I would add bank policy, can break your heart but business, economic climate and political policy doesn’t seem very interested in the human cost of unethical or even criminal bankers conduct. I say bankers because, as always, I would remind everyone that despite legal terminology, a ‘bank’ is the sum of the people who run it. So I’m feeling pretty heart broken even although I’m not the person dying. Neither am I going to be the person most affected by living without my friend. Her husband and children are and even her parents (who can bear the thought of burying their child?).

Anyway, all this has just hammered me. I’ve found it hard to function in the last few days thinking my friend has a couple of weeks to live and there is no way I can do anything about it or even guarantee justice will be served when she’s gone.

I know it’s very non PC of me to talk about human tragedy and banking in the same breath – but tough. It’s about time we stopped pussy footing around what is happening. Above all else, I believe that as a society we should not let the interests of economics or globalisation over take our ability or even our wish to be decent human beings. Sadly, some people, whether because they are genuinely socio-paths or whether their terms of employment push them into that position, are losing site of their responsibilities as human beings.

Maybe they just don’t realise the consequences of their actions? Certainly many bankers and regulators seem willing to turn a blind eye to the reality of bad banking conduct – and this cavalier attitude to individuals is, ironically, doing good banking a huge disservice. Whereas it seemed totally unreasonable up until 2008 to suggest bankers were anything other than professional people and an essential part of society, in general the opposite applies now and the collective name for bankers is often derogatory regardless of whether they are perfectly good people or one of the acknowledged egomaniacs who have hit the headlines in recent years. No one bats an eye to “yet another banking scandal.” We have even become immune to them – right up to the moment they affect us personally. Right up to the moment a bank deliberately targets our business or repossesses our house. Right up to the moment we realise there is no defence against this immoral conduct.

I have been fighting for justice since 2007. I thought it would be easy and that, having identified a massive bank fraud, I could write to senior management of the bank concerned and they would be keen to investigate the matter and make sure any victims of the fraud were compensated and the villains persecuted. I couldn’t have been more wrong. Since then successive senior managements have gone out of their way to bury the fraud I identified and even persecute the victims – presumably in the belief attack is the best defence. But why would you attack your own clients for things your own staff did? I don’t know why but I do know at Board level that has been the banks’ preferred choice.

Nine years on I am still waiting for justice – and so is my friend. Except now justice will come too late. When she dies and she knows she will very soon, she will be the sixth victim to have died without seeing justice for this particular bank fraud.

Last summer one of my colleagues at SME Alliance and I went to a meeting with Head Counsel and Head of Litigation for a major bank. When our conversation turned to Private Criminal Prosecutions, the Head of Litigation became quite outraged and he said that we should realise that when we make criminal allegations we are ruining people’s lives. Even now I remain confused by this comment – does he seriously not realise how many lives his bank is ruining? Not just ruining lives but taking lives? Clearly the man was capable of having empathy towards others because he seemed genuinely concerned we would consider criminal proceedings against bankers. So how comes this same bank is notorious for its lack of empathy to its customers? Are they considered as a different species? Is this why the good old personal bank manager had to go – because he did empathise with his clients? Maybe he even liked them so the idea of selling them  ‘products of mass destruction’ would have have been distasteful to him?

In terms of banking reform I believe we are walking backwards. No one is properly regulating banks and no one is stopping the merry-go-round of greed and corruption which remains rife in our financial sector. On the other side of the fence, public anger is not dissipating and when one person dies one hundred people dig their heels in harder and want to see justice done. In the same way you can only beat a dog so many times before it will bite you, you can only break so many hearts before the consequences become equally dire.

I wish the senior management of banks would wake up to this fact. Justice has a way of being done despite all attempts to stop it and that includes the apparently well known judicial phrase “might over right.”

It is fortunate my friend is deeply religious and she has no doubt she will be going to a better place – neither do I doubt it, she is a good and kind person. The one sure thing we know about life is we we all leave it one day and the departure lounge for that journey doesn’t have a first class section or private jets – just a completely level playing field or “right over might.”

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Save The Bank, Call In The Diplomats! Really??? #RBS

IMG_5058aBefore SME Alliance was started, I would have been hard pressed to believe any bank could behave as badly as Bank of Scotland and its keeper Lloyds Banking Group. Now I’m pretty sure RBS could give HBOS/Lloyds a run for their money in the bad banking stakes. Not a day goes by without a new nightmare story about RBS or Nat West arriving in the SME Alliance in box. Which isn’t to say HBOS/Lloyds has been knocked off my top spot but is rather, a sad reflection of how systemic malpractice is in our banks.

Consequently I don’t know whether to be shocked by the news Jacob Rees-Mogg has asked UKFI to call in the troops to get RBS out of it’s £5BN fine from the US, or whether I think he has a point? From my own point of view it’s tough enough to get RBS to compensate the many UK firms it trashed in its GRG division or it has forced into bankruptcy with exorbitant exit fees for destructive products like IRHP. In fact it’s hard enough – in the face of indisputable evidence, to get them to admit black is black. Paying £5BN to the Americans will surely make it even tougher for UK victims of RBS to get compensation? And what about shareholder (taxpayer) value? We’re already reportedly going to lose £13BN on the sale of RBS – do we have to add £5BN to that figure?

On the other hand, as the US authorities have levied this penalty for the banks sub-prime activities, should RBS, yet again, get away with no penalty? God knows why (and he’s not telling) but apparently senior bankers can’t get prosecuted for the multi billion pound scams they over see, so would it be right to use diplomatic means to curtail the US ability to fine banks as well?

I think this is quite an extraordinary conversation reported in the Telegraph today:

(UKFI) “Are you saying to the Treasury they should use the government’s diplomatic efforts with our closest ally to avoid the British taxpayer being fined $8bn by the American taxpayer?”

(Mr RM)“If I were you, I would be saying, what is the British embassy for if it is not trying to get RBS off this fine? Our closest ally fining us $8bn is pretty stiff.”

There’s a spin and a half. This suddenly isn’t about the misconduct of RBS in America and the penalty they should pay. No, this is about American taxpayers trying to fleece British taxpayers! And if the Americans don’t want to go along with this so called justified diplomacy to get RBS off the hook, what next? Call in the tanks? Really?

Leaving the American issues to one side for a moment, yesterday an article in Reuters, suggested Ross McEwan may have to admit the GRG division of the bank actually did do what many of us have been screaming from the roof top for years – it has been deliberately ruining SMEs and taking (stealing) their assets. Apparently the FCA have “got something” which is a bit of a game changer and the forthcoming report will expose this – or some of it. And this news has come out now because? In my opinion I’d say it’s because the bank is preparing us for an announcement in the near future along the lines of:

we are shocked to discover that in certain instances the allegations made about the treatment of SMEs by the GRG division may potentially have some validity. As a result of the FCA investigation we now have enough evidence to show a small number of SMEs have indeed been poorly served by the bank and we will, of course, make enquiries into what happened in these cases with a view to contacting affected parties.”

Someone who spends a lot of time investigating what goes on in RBS told me a few days ago that, in the event all the outstanding issues RBS has with SMEs were to be addressed, the bill for proper compensation would be in the region of £40BN. Of course that’s not going to happen. If politicians are kicking off at the idea RBS have to pay the US £5BN, what are the chances this Government would allow the bank to pay UK SMEs eight times that? None. The Government may not have any full proof way to stop the US getting its money but they have all sorts of ways to make sure SMEs can’t get theirs. It’s a tall order for most SMEs to even get into a Court room to progress a claim let alone take on the bank’s mighty legal teams.

All the same, I know there are some very determined people out there and some big class actions in the pipe line. With such large losses looming, George Osborne must be worried about the share sale he is so determined to achieve. That’s without even considering the debate on whether or not he should be selling RBS in the first place. I know there’s many organisations and campaign groups who feel RBS should just be nationalised and then split up into smaller banks that would at least be of some use to society. I would agree except that we’ve already lost a fortune on this bank and nothing I have seen or heard in the past 6 months convinces me of anything other than the fact RBS is heading very fast into a brick wall.

Whether the bank is sold back into the commercial world or nationalised, the barrage of allegations and litigation heading its way is not going to stop. And some of the things coming have not even been mentioned yet – in fact I don’t even know if Ross McEwan is aware of what’s coming? I’m very sure the FCA doesn’t.

I suppose another option is if Jeremy Corbyn were to become Prime Minister – he might nationalise RBS, insist no shareholders got anything and no one could could litigate against the bank? But I can’t see that going down well with anyone and least of all the bankers who might then be asked to live on a normal wage.

So what should happen to RBS? Who knows? My husband thinks (and he even said it in a meeting at 10 Downing Street) the only way forward between the banks and the SME sector is a “truth and reconciliation” scenario. It would cost a lot for the banks to come clean and work out suitable compensation for the thousands of SMEs they’ve gratuitously ruined but, were such an agreement even vaguely possible, everyone, including the SMEs would have to take a reasonable and moderate approach. And the billions of pounds the banks would save on expensive lawyers, barrister and court fees would go a long way too righting wrongs, getting the SME sector back on it’s feet and re-establishing some trust.

#RBS to sell or not to sell – won’t make any difference to the fact this bank has backed itself, the Government and the Country into a corner. And no, Mr Rees-Mogg, the British embassy is not there to protect a British Bank from the consequences of its own misconduct. The tax payers didn’t ask for the opportunity to bail RBS out and become shareholders – it was a fait accompli. As such, one would have thought our own Government, regulator’s and justice system (not to mention UKFI) would have been keen to protect the public investment and stop our bankers behaving like bandits.

One last thing – Nick Gould and I had a great meeting this week at the Metro Bank with Peter Musumeci Jr, the right hand man of Vernon Hill. I’m not saying the Metro Bank is perfect and any SME owner could waltz in there tomorrow and get exactly what it wants. However, not only would I say the ethos of the Metro Bank is refreshingly different to our big banks, they also listen and wanted to know what are the key things the SME sector is looking for in a bank. Funnily enough, a lot of what we want is contained in the FCA Principle for Business, starting with principle 1. Integrity. Sadly integrity has been off the menu in some banks for so long I can only think some of our more illustrious bankers have forgotten what it means.

Photograph © Laura Maria Photography 2015