June 19, 2011

Kyriakos Tobras: The Greek Sovereign Debt Financial Scam


By on Sunday, June 19, 2011

How market speculation turn into a financial fraud crime,transforming market profits in money laundering andthe national sovereignty of an EU country in a financial slavery scam! On April 09, 2010, in Athens, Dr. Kyriakos Tobras and Greek Lawyer Mr. George Noulas, filled a Criminal Fraud Charge file submitted to the Attorney General of the Supreme Court. The file is claiming against fraudulent Speculators who, by running an organized criminal plan, they manipulated the Greek Government Bonds Market, with the intent to perform multiple financial profits, deceiving and damaging Greek National Economy and Greek Citizens and Taxpayers wealth.

The Greek sovereign debt crisis analysis could help the world to realize the extreme vulnerability of all our national economies.

To understand how sovereign countries can be easily destroyed and brought to financial slavery by some few fraudsters, through the combination of both naked CDS trading and naked short selling on Government bonds, issued by the Governments in order to finance our Govt debts and the economic development of our countries.

The most important lesson we learned from the Greek case study, is the definition of the limit between market speculation and financial crime. This explains how financial speculation could turn into a fraud crime, transforming fraudulent market profits in pure money laundering and changing economic sovereignty of a country in a financial slavery scam.

The Crime

The crime is a typical financial fraud against the State, consisting in the manipulation of the Greek Government debt by a group of fraudulent Speculators and their Accomplices, Greek and foreign citizens and Government Officers. Those persons, by running an organized criminal plan, represented falsities on the existing Greek sovereign debt and national economy facts and figures, with the intent to manipulate the Greek Government Bonds Market, in order to perform multiple and consecutive financial profits, with the knowledge and the purpose to deceive and damage Greek National Economy and Sovereign Debt, Greek GDP and, consequently, Greek Citizens and Taxpayers wealth.

The direct and consequent damage, only for the year 2010, was calculated at 13 billion euro, stretching Greek National Economy, Next Generations Wealth and Economic Sovereignty of the country. The Greek Government debt financial scam fits with all fraud elements, as required by the most EU criminal laws.

Speculators and accomplices made representations of existing facts with the knowledge of their falsity and with the intent that it shall be acted upon by the plaintiffs ignoring the falsity, their reliance on the truth of those false representations, their right to rely upon it and the consequent damage suffered by the Greek citizens and taxpayers.

Each of the above mentioned elements has been plead with particularity and  proved with clear, cogent and convincing evidence, in order to establish the case. Some of the persons, corporations and institutions involved in the Greek case,  have been recently charged with similar fraud crimes in the USA and EU, following to investigations of Justice and other State and International Authorities.

The Fraudulent Actions & the Omissions to Act

The crime consists in a double financial scam, committed under consecutive actions by the persons identified as fraudulent speculators. 

First, with Naked CDS multiple trading actions (transactions) against Greek Govt bonds, in order to manipulate CDS and spreads rates. This fraudulent trading pushed the lending cost of the Greek sovereign debt to unacceptable interest rate levels, higher than 15%.

Second, with multiple Naked Short Selling actions (transactions) on Greek Govt Bonds, in order to manipulate the bonds market itself. This fraudulent short selling created a fake and artificial bonds offer in the international markets, with the intent to depreciate Greek Govt Bonds values by up to 30%-40%.

In both those circumstances, some of the physical persons directly or indirectly identified as responsible persons of the crimes committed, were at the same time representing as principals, managers, officers, delegates and brokers the Prime Dealers of the Greek Govt Debt, that means the international Banks who, under agreements with the Greek Government, are placing the Greek Govt debt to the international markets.

This is the most important of the accusations, as the same persons responsible for the placement of the Greek Govt debt in the international markets, were double dealing with CDS and Govt Bonds Short Selling, covered or naked transactions, acting against the interest of their customer, that means Greek Republic, omitting intentionally to inform any of the local Supervision and Regulation Authorities regarding their double dealing position.

This represents the most clear and direct case of both conflict of interest, insider trading and financial scam, as the same persons and corporations were first dealing with their customer’s Govt bonds and, at the same time, were double dealing against their customer’s interest, selling the bankruptcy of that customer (Greek Republic) to other customers they had, taking advantage of the inside information and the knowledge they had on the particular circumstances and the expires of the Greek Govt debt, as a result of their first position as Prime Dealers of the Greek Govt bonds.

This is the main reason we accused them to act under a precise and organized criminal plan.

The persons we charged are the same fraudsters involved in the USA scandal during the years 2007-2008, speculating on the CDOs and the CDS issued on the USA subprime mortgages that brought to the Lehman and AIG collapse and to the world financial crisis.

Same persons, same actions, same plan, same money, same scam, same damage.

That means there was knowledge, manipulation experience,  inside information and organization.

The one and unique difference consists in the fact that the Greek case was the first financial scam where market manipulation was organized in order to destroy a sovereign country, instead of a bank or a private corporation. And instead of the CDOs, the crime was committed with the Greek Govt Bonds.

All those fraudulent actions were realized by a series of multiple and consecutive transactions, consisting in buy and sell orders, covered or naked and then recycled, which were left to happen thanks to the omissions to act by the Greek supervision and regulation authorities for the domestic financial market, such as  Bank of Greece, Ministry of Finance and Public Debt Management Agency in first. Those combined fraudulent actions, consisting mainly in both Naked CDS and Naked Short Selling transactions on Greek Govt Bonds by the Prime Dealers of the Greek Govt Debt, created a sovereign debt financial bomb exploded on Greek national economy, destroying the country.

This is the reason we identify the scam as a financial terrorism crime.

The persons we charged

All physical persons identified as fraudulent speculators on the Greek Govt debt manipulation.

That means all responsible principals, officers, managers, delegates, brokers, etc.,  of the major commercial and investment banks involved in the scam, hedge funds, rating agencies  and, together with them,  all Greek partners, representatives, brokers and other physical persons identified as accomplices,  such as Greek Banks and Funds principals, officers, managers, traders and, more than them, blue chip business owners, experts and financial analysts, politicians, Govt officers, Media Owners, etc.

The Direct Damage

Following to the direct and consequent damage of 13 billion euro suffered by the Greek citizens and Taxpayers, on May 2010, Greece entered under an IMF, EU and ECB bailout scheme called "Memorandum".

This is nothing the less than a tailor made Government lending program ruled by a Memorandum of Understanding (MOU) with the lenders, similar to those imposed in Argentina and other Latin America countries. This MOU was imposed in Greece after a real parliamentary coup organized by the Greek government, violating the primary and most essential principles of the Greek Constitution map.

There was not any referendum, Greek citizens were never asked in any way on that and decision was made in Parliament without to respect the quorum majorities required by the Greek Constitution for the international contracts and agreements signed by any Greek Government in charge. And the most terrible thing was that persons, institutions and corporations identified as responsible for the speculation and the financial crimes committed against the country, through years of government debt manipulation and falsities, they have been self appointed as the ultimate country rescuers.

That means Greek Government itself, Banks, Bank of Greece, ECB and EU Commission.

The Indirect Damage – Debt Restructuring

Through the IMF, EU and ECB M.O.U. bailout, Greek government debt real restructuring procedure started on May 2010.

This is a very important step, we need to understand.

MOU bailout modified both the nature and jurisdiction of the Greek sovereign debt.

This was the first, real restructuring procedure started on the Government debt of the country.

Greek sovereign debt issued until 2010, was under a form of a regular uncover debt, simply issued through government bonds, without any understanding securities or any other kind of collateral assets.

That means, existing Greek sovereign debt was not collateralized.

Going under the MOU bailout scheme, the 110 billion euro loan approved on May 2010, was the first Greek government debt issued as a collateralized debt obligation, similar to a CDO contract,  and was approved only with the purpose of the down payment of the previous government bonds expires.

That means, Greece signed a new loan agreement, in order to pay older debts expires.

This is a typical and pure refinance operation.

But the real truth beside is that previous debts were not collateralized and new MOU debts they are.

Through this refinance procedure,  Greece will gradually transform all the existing non collateralized sovereign debt, in a new, collateralized sovereign debt, offering as collateral securities all public properties, future revenues and all tangible and intangible assets of the country.

This is how sovereign debt nature was modified through MOU bailout  agreement.

How That Will Happen ?

After the first 110 billion MOU loan agreement, signed on May 2010, a second one will follow.

This will happen as Greece will not be allowed to return to the markets on 2012 and 2013.

This is the reason why speculation against the country is continuing, even after the approval and the realization of the first MOU agreement.

Government’s financial policy agreed with the lenders of the MOU agreement, encourage international speculators to continue with manipulation against country’s national economy and sovereign debt.

Internal market experiences a day after day continues downturn, private business are constantly closing or bankrupting, inflation and unemployment are blowing, recession is running on an average 4% year rate, poverty and criminality are growing up, and all this explosive, hard recession economic mix, introduces Greece in the vicious circle of a new and continue deficit generation that will keep creating additional, new sovereign debt, as deficits could never be financed by the future economic revenues of the country, as GDP is constantly dropping down.

After all that, there will not be any market in the world intended to finance a country in such a financial situation, and that means on the year 2012 a second MOU bailout will follow the first one.

And again, this one will be also issued as a collateralized debt.

And again this will also be approved limited with the purpose to pay older government debt expires, continuing through this refinance procedure to transform the whole Greek sovereign debt into a new, collateralized debt obligation.

When over a 50% quote of the existing sovereign debt of the country will be transformed in a collateralized debt obligation, only then default will be leaved to happen in Greece.

In this way, all Greek national assets and resources will become ownership of the country lenders, as the new Government loans under the various MOU bailout agreements, not only will be 100% collateralized but they will also be regulated by the English Law.

And this is how jurisdiction of Greek government debt is gradually changing, as existing debt is regulated by the Greek law.

That means execution procedures on public properties and any kind of tangible and intangible assets will be admitted and Government debt transfer to any third parties, partially or totally, will also be free to happen.

After all that, Greece will never allowed in the future to be a sovereign country, as  Government debt could be easily transferred under a regular factoring agreement  to any physical person, institution, corporation or country, such as Turkey for example.

What Is The Actual Status Of The Case

The criminal charge case is now at the most important point.

Preliminary investigations are recently concluded, after a very detailed exam from both Prosecutor General Office and Greek Financial Police Authorities (SDOE).

On February 2011, we were invited by the Financial Police Dept in Athens to give additional information regarding Greek Govt bonds short selling transactions, between January – April 2010.

On this purpose we submitted an additional file with all that information.

On May 2011, Mr. Panos Kammenos, a deputy of the Greek Parliament, following to the Greek justice authorities investigation on the criminal fraud charge file, submitted a parliamentary interrogation to the Minister of Economy and Finance, asking from the Government to inform Greek Parliament on all the specific details regarding Govt debt Prime Dealers, CDS and Naked CDS Traders, Govt Bonds Short Sellers, Banks, Funds and physical persons indentified as buyers, sellers or short sellers and, additionally, to inform Greek Parliament on the official results of the recent EU and USA state and justice authorities investigations on Greek Govt debt speculation, CDS cartel frauds, etc.

After that, the complete charge file is now transmitted to the Prosecutor  for the Financial Crimes at the Athens Court, who is starting with the main investigation procedure and, during this phase, he will investigate on all specific physical persons and corporations, both Greek and foreign citizens.

This is a criminal charge case and only physical persons can be indicted, that means all responsible persons indicted with the charge file, such as banks and funds principals, managers, officers, representatives, brokers, dealers, CDS traders, Short Sellers, etc., Govt Ministers and Officers, Bank of Greece principals, officers and directors, together with the others who will be indicted during the preliminary investigation process.

All those indicted persons will be called to the Prosecutor’s Office to explain their actions or omissions to act, that means they have to explain what exactly they did, how they did it, why they did it, on behalf of whom they acted, etc., etc.

Having a good experience on previous similar cases, I’m sure that this moment is very critical as a lot of them will start to talk.

Some of them because they’ll get afraid, others because they didn’t share any of the profits, some others because they didn’t got the profits promised by the speculators who organized the scam, etc., etc.

We trust in God, Justice and Common Sense, hoping that the Greek charge file will push other European citizens and taxpayers to do the same, as happened recently in Spain, where a similar criminal file was submitted to the local Justice Authorities.





Read latest developments about this issue here


For more information: Dr. Kiriakos Tobras *
http://www.stopspeculators.gr/
Article by Stacy Herbert (www.maxkeiser.com)





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