Doris Money, what bank called Farepak savers' cash as thousands who lost out in scandal are cheated out of justice

Doris Money, what bank called Farepak savers' cash as thousands who lost out in scandal are cheated out of justice - Daily Mail

When firm went into administration cash was used towards repaying the bank's 31million loan

PUBLISHED: 18:46 EST, 20 June 2012 | UPDATED: 01:14 EST, 21 June 2012

Anger: Thousands of Farepak Christmas hamper customers were cheated out of justice yesterday

Thousands of customers who lost money in the Farepak Christmas hamper firm scandal were cheated out of justice yesterday.

As a high-profile court case against the directors of the failed firm collapsed, it emerged that bankers had referred to customers' cash as 'Doris money'.

It was also revealed that bankers, HBOS, twice refused to protect 4million saved by customers, mainly on low incomes, to buy a hamper.

The Insolvency Service abandoned its five-year Farepak investigation after extraordinary new evidence showed that HBOS turned down the option of placing the money in a trust.

This meant that when the firm collapsed into administration in 2006 the cash was used towards repaying the bank's 31million loan rather than refunded to Farepak's vulnerable customers, many of them elderly.

More than 150,000 customers who had paid regular instalments for a Christmas hamper were left on average 400 out of pocket and offered just 15p in the pound.

Hugely embarrassing emails from senior bankers at HBOS, which is now owned by Lloyds Banking Group, showed they referred to the cash from Farepak's vulnerable customers as 'Doris money'.

The new evidence will heap further pressure on Peter Cummings, known as the banker to the stars of the financial world, who was handed a 'warning notice' and punitive fine by the Financial Services Authority in April as part of its investigation into HBOS.

It has been reported that Mr Cummings, who is challenging the FSA's rebuke, had been the 'ultimate arbiter' of what happened with Farepak.

This is the second collapse of a case brought by a government department this week – the Insolvency Service falls under the responsibility of the Department of Business.

Rich pickings: When the firm went into administration in 2006 the cash was used towards repaying the bank's 31million loan not vulnerable customers

On Monday the Serious Fraud Office dropped its investigation into property tycoon Vincent Tchenguiz.

On Farepak, lawyers representing the Insolvency Service had asked Mr Justice Peter Smith in the High Court to disqualify its former bosses from being company directors, accusing them of 'unfit conduct'.

The former bosses, including Sir Clive Thompson, an ex-president of the Confederation of British Industry, contested the disqualification applications.

But yesterday the government's companies watchdog abandoned its bid to penalise the directors after the new evidence emerged that included the fact that they had twice tried to protect the cash of customers.

Business Secretary Vince Cable said he felt 'huge' sympathy for 'those who lost out' and would reflect on the decision by the Insolvency Service.

A spokesman for Lloyds Banking Group said: 'As this matter is subject to ongoing legal proceedings, it would be inappropriate to comment.

'We have assisted the relevant authorities at all times during their investigation of European Home Retail plc and Farepak and the conduct of their directors.'

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

2006 ....its now 2012, 06 years to finaly get no justice in the end, and are any of the legal costs down to the tax payers ??

- pat, cleveland, 21/6/2012 17:52

It would appear that BOS overstepped the Rubicon of work-out bankers and became shadow directors. EHR Group went into administration at the point of time when Farepak deposits were at their highest for the year circa £35m and were applied to repay BOS loan made in 2000 to finance acqisition of DMG Group for £45m. It is surprising that this was not discovered by Department of Trade whose report has still not been made public. Where is the major law firm that will take action on pro bono basis against BOS as if they acted as shadow directors they would be liable to all group creditors including Farefak depositors. This would be considerable more than the £3m gesture to Farepak depositors made at the time of collapse

- paul walton, richmond surrey tw10 6hf, 21/6/2012 17:44

Why has this only come to light now? Didn't the Directors tell the Prosecutors as part of their defence? Did the Directors try to change Banks?

- David, Tamworth, England, 21/6/2012 17:21

Why did they do it? Because they were allowed to and more or less knew nothing would happen. Does anyone actually think these people don't think out what could happen to them before they do anything a bit 'iffy' and take expert advise on such?

- PC, Liverpool, 21/6/2012 15:24

HBOS knew very well that it was customer money. Just like MF Global knew the 1.2 billion dollars was customer money. They stole it, pure and simple. These people should apply to the Criminal Compensation Scheme for redress and the return of their money. Remember the first law of banking - There is no law in this business.

- Citizen119, City17, SW Region, EUSSR, 21/6/2012 15:02

What I can't understand is: why would anyone save in one of those schemes anyway? Can't they save in a bank/building society account - or a credit union?

- Jessica, The beautiful south, 21/6/2012 14:33

Why can't the Farepak directors be made to sell their houses to compensate those who have been duped?

- Rich, South Normanton, UK, 21/6/2012 14:04

Look up the addresses of the Farepack Directors - and anyone who lives near, pay them a visit. You won't get any money, but neither will they sleep well at night.

- juharrogate, harrogate england, 21/6/2012 12:50

=====Banks are businesses not charities. - John S, Bromley, 21/6/2012 9:56==="businesses"??? Alongside having no compassion, you also can't spell. All round loser. - The angel, London, 21/6/2012 11:22====== The angel, London: What is wrong with "businesses" ? It is the correct plural of "Business"

- Peter, a quiet corner, 21/6/2012 12:48

Banks are businesses not charities. - John S, Bromley, 21/6/2012 9:56>>>>>>>>>>>>>>> 47 red arrows already. So banks should operate like charities. Charities rely on donations. What would banks use as donations? Your savings? ....BTW There is a bug in the DM's sofware. Avoid using the quote sign. The apostrophe seems to be okay.

- John S, Bromley, 21/6/2012 12:40

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The Smart Way To Make Money From Forex Trading - istockAnalyst.com (press release)

(By Dave Goodboy) If you have been following the markets for very long, then you have probably noticed all the flashy ads for foreign exchange trading, or "forex" for short. They seem to be everywhere, from the business TV channels and magazines to billboards and the Internet. I have even seen them places you wouldn't expect, like during the game on Sunday.

But did you know there's a way to profit from the massive amount of forex trading that's going on without bearing much of the excessive risk that goes along with it?

Let me explain...

Forex trading refers to the over-the-counter market in which the foreign currencies of the world are traded. It's also a rapidly-growing segment of the online trading industry.

But rather than dive into forex trading yourself, you should consider investing in the forex industry itself.

Here's what I mean...

Amazing growth...
The average daily retail trading volume has expanded at a compound annual growth rate of 37.1% from 2000 to 2009, according to a 2010 analysis by the Aite Group.

That's massive growth no matter how you cut it.

Most interestingly, even with this growth, retail forex traders still represent a tiny sliver of all retail traders. There are more than 100 million retail traders globally, but only 1.25 million who trade forex. So the market could easily continue to grow. Provided the international markets, 24 hours a day, six-day a week access, and very low access costs for the trader, this market is custom made for expansion.

Betting with the house
Despite the popularity, not surprisingly, most retail forex traders lose money. In fact, in a recent interview, Drew Niv, CEO of FXCM Inc. (NYSE: FXCM), stated that only about 20-30% of traders make a profit.

This means that at least 70% of all traders lose money in the retail forex market. These losses are primarily due to the ultra-high leverage provided to forex traders. Combine leverage with new, inexperienced traders, and it's a recipe for disaster -- at least on the trader side of things... On the business side, it's great.

Depending on the model used by the dealer, these losses may add to their bottom line. Here's how it works...

There's the direct-access model, also known as "no dealing desk," and the counterparty model. Put simply, the "no dealing desk" model matches trader's positions with other traders or banks. However, some dealers act as the counterparty to their customer's trades. This means the dealer takes the opposite side of the transaction, and if the trader losses, the dealer wins.

In addition, many dealers control their own trading platforms, which open up an entirely new avenue for profiting from traders.

Regardless of the model used, all retail forex dealers make money from the spread between the "bid" and "ask" of the different currency pairs. The dealer marks up the spread, which becomes profit. To put it bluntly, the more traders trade, the more money the dealer makes. This is why dealers encourage short-term trading by offering free technical analysis chart packages, education, news feeds and other tools to keep traders active in the market.

The dealers
There are two main U.S.-based forex dealers that are also public companies. One, I've already mentioned, is FXCM. The other is GAIN Capital Holdings (NYSE: GCAP).

FXCM claims to be a "no dealing desk" model, except for its micro-accounts where it acts as the counterparty. On the other hand, GAIN Capital Holdings acts as the counterparty for most of its retail business, according to its 10-K filing with the SEC.

Let's take a closer look at the larger of the two forex dealers, FXCM.

FXCM posted first quarter revenue of nearly $103 million, up 8% compared with the same period last year. Net income was up 4%, and most interestingly, customer equity spiked 47% from the same time last year. Active accounts jumped 22% from same time period.

The company is actively seeking new markets and acquisitions. Just recently, it purchased 50% of Lucid Markets, a private U.K.-based proprietary trading group, in an effort to make deeper inroads into the institutional forex market. Adding icing to the cake, FXCM just announced a small quarterly dividend of $0.06 per share.

Taking a look at the chart, the company is trading above both its 50 and 200-day moving average. However, the stock hit resistance in the $12.50 range, and it has since fallen back, setting up a solid buying opportunity on a pullback.

Risks to Consider: Just like in the forex market itself, there are risks in betting on the dealers. The primary risk is regulatory. Recently, the U.S. capped the amount of leverage domestic forex dealers can offer their clients. This sent many traders overseas in search of higher leverage. Although forex remains lightly regulated, tighter controls may be on their way.

Action to Take --> The recent pull back from FXCM's highs has placed the stock on my radar screen for a potential buy in the near future. My target price for this stock would be about $15.

-- Dave Goodboy

This article originally appeared on StreetAuthority
Author: Dave Goodboy

Finance access for small firms 'eases' - BBC News

21 June 2012 Last updated at 07:19 ET

More small and medium-sized businesses (SMEs) in Scotland are successfully applying for finance, according to a Scottish government survey.

The SME Access to Finance report found 87% of firms were able to access all of the money they were seeking - up from 79% in the last survey in 2010.

There was also a fall in the number of outright rejections by banks.

But there was a marginal rise in the proportion of firms who secured none of the money they were seeking.

The Scottish government said the survey provided "some evidence of an easing in supply constraints".

The survey indicated a rise in demand for finance across nearly all sectors, with 9% of all firms seeking new and/or additional lending and a third of all firms looking to renew existing facilities.

Manufacturing and construction were among the sectors with the highest application rejection rate.

The latest survey suggested demand for finance had remained broadly stable since the last survey in 2010, with 45% of firms looking for credit over a three-year period to 2012. That compared to a figure of 43% in the three years to 2010.

Finance Secretary John Swinney said small and medium-sized business were "the lifeblood of the Scottish economy".

He continued: "Collectively they employ over one million people and account for around 54% of total employees in Scotland's private sector.

"Any evidence of increased lending to SMEs is good news for our economy and will be a key element in building a sustained recovery."

Mr Swinney said lending criteria were stricter now than in the past but the latest figures showed that accessing finance was still possible.

"Businesses must present a robust, commercially sound proposition," he said.

"Companies can come to our agencies or Business Gateway for advice and information before they even approach the banks and I would urge them to make use of all of the services available."

Lending call

Earlier this year, Mr Swinney urged the UK government to do more to accelerate bank lending for SMEs.

His call followed UK Treasury data indicating Scottish SMEs received less than 5% of lending from a project set up by the UK government and five major banks.

Under Project Merlin, banks committed to making £190bn of new credit available in 2011.

Scottish SMEs took 4.8% of gross lending, but accounted for 6.4% of UK SMEs.

In March, the UK government introduced a £20bn National Loan Guarantee Scheme, aimed at boosting bank lending to SMEs.

Rangers crisis: Ibrox season ticket renewal money held by 'oldco' - Stv.tv

Ibrox season ticket renewal money is being paid into and held by the soon-to-be-liquidated 'oldco' Rangers.

The Sevco group that formed a new business entity to purchase the club’s assets confirmed it is using Rangers FC plc, incorporated in 1899, to receive any season ticket renewal cash paid over.

Rangers claim the money is being held by the old company, which is still under the control of administrators Duff and Phelps, and will be later transferred to new business entity, Sevco 5088 Limited, as part of the deal reached with the consortium led by Charles Green.

Direct debit payments for around 30,000 season tickets are being processed after renewals were sent out by the club on June 8.

A spokesman for Rangers said: "The season ticket renewal direct debits have been operated within the old company until they are transferred to the new company in an ongoing process that will be completed in due course."

Mr Green previously stated that the season ticket renewal cash was not being used to fund his consortium’s takeover and that it would be ring-fenced and held in a "secure" account.

In the failed company voluntary arrangement (CVA) proposal, Duff and Phelps sought those owed money to approve that all season ticket sales and player transfer cash to be held in a bank account by their English solicitors Taylor Wessing. They sought creditors permission to the exclude this money from the payout pot, while they also stated in the CVA proposal that they may seek Sevco’s approval to use the cash to meet "trading costs" should the club have successfully agreed the pence in the pound plan.

On Thursday, the Rangers’ Fans Fighting Fund released a statement after its representatives had met with newco chief executive Mr Green and chairman Malcolm Murray.

In a statement the fund said it had "received satisfaction on the future security of the property assets, forward flow funding and the ring fencing of season tickets for the good of the club."

The fund, which is led by former player Sandy Jardine and at was launched by ex-manager Walter Smith, said it "would encourage fans to renew their season tickets at this time to demonstrate our support for our manager Ally McCoist his management team and our players."

On the back of the meeting, the fund called on supporters to "show solidarity for the club".

Mr Green added: "I can reassure all fans that season ticket money will be ring-fenced in a secure account and will not be used before the current issues surrounding the club, such as what league we will be playing in, are resolved."

Mr Green’s consortium, which is backed by investment banking operation Zeus Capital and Scottish golf clothing firm Glenmuir among others, paid £5.5m to buy the club’s assets, cover the £3m fees of Duff and Phelps and an estimated £1m for the future liquidators of Rangers FC plc, BDO. According to the CVA proposal document, this money will be supplemented by around £2m in outstanding transfer fees owed to Rangers and the cash at bank.

According to the administrators, who were appointed on February 14 after the club had failed to pay around £14m in PAYE and VAT to HMRC following Craig Whyte's May 2011 takeover, around 37,900 season tickets were sold at Ibrox for the 2011/12 season.

Mr Whyte used future season ticket sales to secure £25.3m from London firm Ticketus to effectively fund his takeover by wiping out the club's £18m debt to Lloyds Banking Group.

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Thursday, June 21, 2012