ALEX BRUMMER: The Trump fraud trial does more harm than good to financial justice
The eyes of the financial world are firmly on the trial of alleged crypto fraudster Sam Bankman-Fried and his FTX exchange this week.
The case has attracted particular attention because of writer Michael Lewis’ insightful approach to the Bankman-Fried story.
He is a specialist in unraveling the character of the oddballs who operate on the fringes of the 21st century financial world.
Equally fascinating is the civil fraud trial in another Manhattan courtroom.
Donald Trump is accused by New York Attorney General Letitia James of “grossly” inflating his wealth to impress Forbes magazine and obtain better terms from bankers.
Indictment: Donald Trump is accused by New York Attorney General Letitia James of massively inflating his fortune to impress Forbes magazine and obtain better terms from bankers
The goal is to strip Trump of his property and ban him and his family from doing business in New York.
Few dispute that Trump has a malign influence on American politics and that the law should be applied in his efforts to derail the democratic process.
Still, there is something strange about the civil trial in Manhattan. No one who watched Trump could doubt his self-aggrandizement.
The tendency to exaggerate the size of his wealth should come as no surprise. Even more puzzling is that Deutsche Bank, which lent to the former president’s companies, accepted personal reviews.
However, the basis on which these reviews were accepted was not disclosed.
Firstly, property values fluctuate like a yo-yo, which is why there are definitely bargains to be had in times of rising interest rates.
Second, while Forbes may not need to carry out a wealth assessment when compiling its billionaires list, it would be unthinkable for banks, accountants and lawyers to carry out self-assessments based on trust. Independent appraisers check what the borrower or seller has to say.
If Trump has provided questionable data, it is their job to uncover it. As anyone who buys or sells a home knows, appraisals are in the eye of the beholder and can vary greatly.
Some of this is reminiscent of retailer Philip Green’s battles in the House of Commons over the sale of BHS to Dominic Chappell – later convicted as a tax dodger – which was approved by the City establishment.
There is no doubt that tyrants like Trump are capable of exerting undue influence over professional advisors. But as Judge Engoron noted, the “buffering” of values and standards in the Trump case “does not appear to have caused losses to creditors.”
It is possible that secret payments were made to consultants, which led to distorted values being assigned to the transactions.
But this poorly targeted Trump fraud trial is doing more harm than good to financial justice. The focus should be on real white-collar crime charges like those against Bankman-Fried.
Most concerns about online fast fashion company Boohoo centered around executive greed, cross-company transactions and poor factory conditions.
Founders Mahmud Kamani and Carol Kane were able to weather the stormy waters because investors fell for the durability of their online model during the pandemic.
Boohoo even had enough confidence to snap up totemic brands Karen Millen and Debenhams when the high street went horribly wrong.
Now there are questions about the durability of his model. The group continues to generate underlying profits.
Although margins are tight, they look robust enough. Sales are another topic. Despite inflation, revenue is expected to fall between 12 and 17 percent through February, compared to 5 percent forecast in the past. After another crash, shares are more than 90 percent below their 2020 peak.
Compare Boohoo with Primark, owned by ABF, where stores are being looted and sales rose 15 percent in the year to September. The comeback of stationary fashion can also be observed at M&S, where Jaeger has become an affordable luxury brand again.
Frasers is in the starting blocks as a strategic shareholder with a 10 percent stake. Could Mike Ashley want more than just a bite?
American patients and class action lawyers are adept at taking down big pharmaceutical companies.
AstraZeneca will pay £350 million to settle allegations that it failed to warn consumers about the risk of chronic kidney disease from its reflux drug.
Nexium is still on the shelves at Boots and for consumers of its prescription equivalent Omeprazole (like this author) such results are never instilling confidence.
When it comes to health, financial settlements should never be viewed as just another cost of doing business.