Tag Archives: Oslo

Norwegian Bank Claims To Be Victim of Conspiracy

This must be the most interesting news story coming out of Scandinavia this week: The Norwegian bank, DnB NOR, who’s been found guilty of selling toxic saving products to private investors, not revealing the real risk involved, is facing the court again after appealing the first ruling. In its defense, the bank now claim they are the victim of a witch-hunt, and that the allegations are a result of a conspiracy against the bank.

“The majority of facts is conspiratorial in disfavor of the Bank.”

Anders Ryssdal 

Claiming Conspiracy:: Anders Ryssdal (Wiersholm, law firm), Nils Gunnar Brattlie (DnB NOR Markets), lawyer Catherine Sandvig and lawyer Trond Bjerkan. (Photo: DN.no).

I guess it could be seen as a sign of desperation when DnB NOR’s lawyer writes in the appeal paper that the ruling by Oslo District Court in June last year is “conspiratorial in disfavor of the Bank,” and that the choice of words in the verdict shows that the court has decided to “get” the Bank. But it could also be a part of a sneaky strategy to derail the whole case.   

Well, if I was a lawyer defending DnB NOR, I think I would have chosen a completely different – less ridiculous – strategy.

But perhaps Norway’s main bank is running out of arguments.

However, as you all know, conspiracy theories are always impossible to prove – or reject.

And that’s probably what DnB NOR is aiming for; making it impossible for the Borgating Court of Appeal to reach another verdict in disfavor of the Bank.

It is the Norwegian business website, DN.no, who have gotten hold of the appeal papers.

According to the website, DnB NOR’s lawyer Anders Ryssdal at the law firm Wiersholm, writes:

“In general, is the majority of the court’s valuation of the evidence conspiratorial in disfavor of the Bank.” 

The bank’s lawyer also argues that the Oslo District Court have chosen to disregard more confident calculation made by other experts, including DnB NOR’s own.

According to the appeal papers, DnB NOR argues that the majority of judges at the Oslo District Court have revealed through their wording that they more or less had decided to “get” bank before they made the  ruling.

The court use words and expressions of an “odious character,” the bank-lawyer  writes, in order to create an impression of the DnB NOR’s products as “suspect.”

“Odious” means disgusting or cruel.

As an example of the conspiratorial, odious wording,  DnB NOR points to the District Court’s conclusion that says the Bank’s sale of these saving funds is to be considered as marketing of “suspicious products,” according to a “carefully thought out plan.”

11 Years of Outhauling

This case started in 2000, 11 years ago, when private investor Ivar Petter Røeggen placed all his savings in two of DnB NOR’s so-called structured funds, that according to the Bank was guaranteed a pay-off.

But five years later Mr. Røeggen had lost NOK 230.000 of his original investment of NOK 500.000.

And in 2006 – encouraged by the money magazine “DINE PENGER” – he files a complaint to the Norwegian Consumer Council claiming the Bank had made false promises, and withheld information about the real risk involved.

According to the calculations by the independent experts, there was a 60% chance of loosing money by investing in DnB NOR’s guaranteed structured funds.

The Norwegian saver requires that DnB NOR cover his losses.

Now, the snowball starts rolling:

In December 2007 the Consumer Council says in a hearing, held by the Norwegian Financial Authority that it should be prohibited to sell these structured products to non-professional investors.

This becomes the conclusion of hearing, and the recommendation later sent to the Norwegian finance ministry, in January 2008.

The finance ministry comply with the request and makes it into law, March 1. 2008.

In January 2009 the national Finance Board of Appeals agrees with Mr. Røeggen, but just a couple of hours after the announcement by the Board of Appeals, DnB NOR makes it clear that they will not comply with the decision.

In April 2009 the case opens at the Oslo District Court, who in June the same year comes to the same conclusion as the Consumer Council, the Financial Authority and the Finance Board of Appeals.

However, DnB NOR still refuse to accept this view, and appeals the verdict to a higher legal body – the Borgating Court of Appeal.

And here we are…

Of Fundamental Principle Importance

According to Norwegian mass media there are about 2.000 other private investors who have lost money by placing their savings in the same “guaranteed” funds as Ivar Petter Røeggen.

They are eagerly waiting for a final verdict – if Norway’s partly state-owned bank is forced to cover the losses of all these people, it could result in a double-digit billion loss for DnB NOR.

At least, that’s what the Norwegian media, authorities and politicians think.

The fact is; it could be a helluva lot more…

For some reason, they seem to forget that DnB NOR now is the sole owner of the Baltic bank DnB NORD.

Up until January 2011, the Norwegian bank owned the Baltic bank in a 50/50 relationship with the German bank NORD LB – one of Europe’s leading developers and suppliers of structured financial products.

Due to the shady cross-border activity over the last decade, no one knows excactly how many dissatisfied customers that might turn up if DnB NOR loses this case.

But it will definitively be more than 2.000…

International Focus

The law suit against DnB NOR is also being followed closely by the international banking community.

The consequences can be far more widespread than most people think.

In the meantime, global banks are scaling down on their dodgy dealing as fast as possible.

The British Financial Services Authority (FSA) has advised more financial groups to amend or withdraw adverts as it now begins to cracks down on misleading advertisements, according to the law firm Reynolds Porter Chamberlain.

It has been reported that there was a 32% increase in promotions withdrawn in 2010, compared to 2009.

The increase is reported to have continued in the first quarter of 2011, with 66 withdrawals compared to 50 in the same period in 2010.

It is said that the crackdown is ahead of new powers being given to its successor, the Financial Conduct Authority.

The Financial Times has described one of the withdrawn adverts for an investment fund as claiming a 30 per cent headline growth rate but with risk warnings buried in the small print.

Jonathan Davies, partner at RPC, says:

“There is a very competitive market for many financial products. This puts pressure on firms to make their offering stand out and it is very easy to fall foul of the rules. With the FSA clamping down and with new powers for its successor on the way, it is more important than ever for businesses to make sure their adverts are watertight.”

So, if DnB NOR gets another conviction in the Appeal Court over the next weeks, it may blow a big hole in the ballon for financial institutions all over the world.

Related by the EconoTwist’s:

3 Comments

Filed under International Econnomic Politics, Laws and Regulations, National Economic Politics

Hackers Attact Norway's Peace Prize Institute

About 300 private individuals, companies and organizations may be the victims of computer espionage after visiting the  webpages of the Nobel Committee and the Nobel Institute in Oslo, Norway, on October 26 and 27. The visitors got spyware installed that gave outsiders full access to their computers. This week, the Nobel Institute reported the attack to the local police in Oslo.

“It can be anything from the fact that someone wants to give China a bad reputation to the Chinese themselves.”

Frank Trail


The espionage via the Nobel Institute have been going on for a much longer period, and is much more extensive than previously known. the Norwegian newspaper Aftenposten writes on their website. According to the National Security Agency it took eleven days from the site was hacked to the highly sophisticated break-in was discovered.

The cyber attack was discovered by Telenor Security Operation Center (TSOC) on October 25 after several customers of the telecom company had reported hacker attacks.

TSOC then notified the National Security Agency and the Nobel Institute.

“It is hardly economic motives behind this attack, and the people behind it obviously has a lot of money. To carry out such an attack, they have to exploit a weakness in software only available on the illicit market, and used it against the Norwegian Nobel Institute. This is a very expensive methods and could be used for other types of economic cyber crimes  – instead of attacking Nobel Institute,” head of TSOC, Frank Trail. says.

All traces end up in a computer at a university in Taiwan that anyone has access to. This computer was the command center that controlled the attack, and a huge bulk of information was downloaded.

However, it’s practically impossible to find out who controlled the public computer in Taiwan.

“It can be anyone; from someone who wants to give China a bad reputation, to the Chinese themselves. We now have extra focus on this to see if the attacks repeats itself towards peace prize ceremony and the Nobel Prize Concert.”

Mission Impossible

“Between Monday afternoon and Tuesday morning, I estimate that we may have had up to 300 visitors using Firefox browser version  3.5 and 3.16,” librarian and IT Manager Bjørn H. Vang at the Nobel Institute says.

“We have no way to track who they are. What is most regrettable about the matter, is that people who have visited our website may have been harmed,” Vang adds.

Both the National Security Agency of Norway and the national criminal police are now investigating the data logs at the Nobel Institute.

“Internal Affairs has already made several technical studies. These are very complicated matters, especially if we end up in a server abroad. If it leads us to other countries, it will require a lot of resources and we’ll have to  ask whether or NCIS Økokrim (The National Authority for Investigation and Prosecution of Economic and Environmental Crime) will take over the case. Even if we find out who is behind, so there are not many countries who are willing to disclose this information,” police chief, and head of the finance and corruption group, in Oslo, Rune Skjol, says.

Related by The Swapper:

2 Comments

Filed under International Econnomic Politics, National Economic Politics, Philosophy, Technology

Norwegian Oil Explorer Files For Bankruptcy

The Norwegian Oil Rig Company Petrojack have Monday filed for bankruptcy according to national laws. The company’s shares was suspended from Oslo Stock Exchange Friday after a weekly gain of almost 100%.

“In spite of the extensive efforts that have been made, it has not been possible to find a solution that can secure the continued operation of the Company or a solvent liquidation.”

Petrojack


The board of directors of Petrojack ASA (“Petrojack” or the “Company”) has resolved to file for bankruptcy proceedings. A bankruptcy petition will be submitted to Oslo District Court before opening of trade on Oslo Børs today, 8 March 20, the company says in a statement.

It’s been know for months that the oil exploration company have been in deep financial trouble.

In spite of the knowledge, the shares of Petrojack rose almost 100 percent last week, until Oslo Stock Exchange suspended the trading friday after another jump of 45 percent.

Petrojacks biggest shareholder is Petrolia Drilling – one of the major supplier of drilling vessels for offshore, deepwater oil and gas exploration and development drilling in the North Sea.

“The Company has in close co-operation with its principal creditors explored the possibilities for restructuring its debt and/or divesting its assets for the benefit of its creditors and shareholders. In spite of the extensive efforts that have been made, it has not been possible to find a solution that can secure the continued operation of the Company or a solvent liquidation. The board of directors of the Company has therefore concluded that the interests of the creditors are best served through a realisation of the Company’s assets through bankruptcy proceedings,” Petrojack says in a market statement.

Petrojack has since November 2009 been unable to service the interest on its bond loans. The Company has also failed to service its other debts as they have fallen due, including tax liabilities which fell due in December 2009 and January 2010.

Statement.

The shares of Petrolia Drilling (PDR) is down 6% monday morning, while the benchmark index in Oslo (OSEBX) is down 0,1%.

Shareholders Money Lost

“We do not anticipate any return to the shareholders,” analysts at the Norwegian brokerage firm Terra writes in an update.

• Petrojack has resolved to file for bankruptcy. This was announced in the market this morning.

• We are not surprised by the announcement, as we have seen the company in a distressed financial situation with significantly lower cash flow than debt payments.

• Based on the company’s asset values and liabilities, we do not anticipate any return to the shareholders and doubt if all the debtors will be covered fully.

Conclusion:

“Petrojack has filed for bankruptcy, which is not any surprise to us. Based on the company’s asset values and liabilities, we do not anticipate any return to the shareholders.”

Here’s a copy of the update from Terra.

Related by the Econotwist:

Consumer Confusion Index At Record High

Evaluation Of Norwegian Monetary Policy

Norway’s GDP Fall For First Time In 20 Years

How To Make A Rat Look Like A Puppy

The Northern Lights (And Dark)

Fears “Dutch Disease” In Norway

Norway: Key Policy Rate Remains Unchanged

Norway Economic Update – “Partly Grim”

Fear Of Norwegian Housing Market Collapse

Fighting The Reality

Norwegian Up- and Downgrades

Central Bank of Norway raise interest rate again

“The Norwegian Syndrome”

Not So Rosy After All

Reblog this post [with Zemanta]

2 Comments

Filed under International Econnomic Politics, National Economic Politics