Thursday, 22 January 2009

Recession - the mother of invention

A recession is the mother of invention, and never one to miss an opportunity, fraudsters are reportedly targeting investors whose money is trapped in Icelandic bank, Kaupthing Singer & Friedlander.

According to Citywire, depositors with money trapped in Kaupthing Singer & Friedlander, on the Isle of Man, which went into administration late last year, have been approached by a company calling itself Kristen Heather Investments (Isle of Man). The company claimed it could return depositors' funds in Kaupthing Singer & Friedlander for a fee.

The Isle of Man Financial Services Commission says the firm has a fake address and had copied the real bank’s website. PricewaterhouseCoopers, which is liquidating Kaupthing, says it appeared to be "an entirely fraudulent endeavour".

As I mentioned in my previous post, Madoff - who is culpable?, with irate investors and shareholders having lost substantial sums of money, there is likely to be a raft of legal action in the wake of the credit crisis. Some of the big class action suits may be some time in coming, but meanwhile, according to The Press & Journal, an 83-year-old QC is suing Royal Bank of Scotland claiming that the bank was "insolvent" when it "fraudulently" sold him shares in a rights issue.

As part of his small claims action, the QC is trying to prove that the bank was "technically insolvent" when it sold him stock valued at £1,282 as part of a rights issue. If the case is successful, it could lead to similar action being taken by other bank shareholders.

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