Future of deposit in binary options brokers22 comments
How do i make money binary trading
Volkov would speak to a sales trader—often, a young woman named Dina Maksutova—and ask her to place two trades simultaneously. In one, he would use Russian rubles to buy a blue-chip Russian stock, such as Lukoil, for a Russian company that he represented.
In the second trade, Volkov—acting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islands—would sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros.
Both the Russian company and the offshore company had the same owner. Deutsche Bank was helping the client to buy and sell to himself. At first glance, the trades appeared banal, even pointless. Deutsche Bank earned a small commission for executing the buy and sell orders, but in financial terms the clients finished roughly where they began. To inspect the trades individually, however, was like standing too close to an Impressionist painting—you saw the brushstrokes and missed the lilies.
These transactions had nothing to do with pursuing profit. They were a way to expatriate money. Because the Russian company and the offshore company both belonged to the same owner, these ordinary-seeming trades had an alchemical purpose: On the Moscow markets, this sleight of hand had a nickname: Mirror trades are not inherently illegal.
The purpose of an equities desk at an investment bank is to help approved clients buy and sell stock, and there could be legitimate reasons for making a simultaneous trade. A client might want to benefit, say, from the difference between the local and the foreign price of a stock. Fourteen former and current employees of Deutsche Bank in Moscow spoke to me about the mirror trades, as did several people involved with the clients.
Most of them asked not to be named, either because they had signed nondisclosure agreements or because they still work in banking. Viewed with detachment, however, repeated mirror trades suggest a sustained plot to shift and hide money of possibly dubious origin. In an internal report, Deutsche Bank has admitted that, until April, , when three members of its Russian equities desk were suspended for their role in the mirror trades, about ten billion dollars was spirited out of Russia through the scheme.
The lingering question is whose money was moved, and why. Deutsche Bank is an unwieldy institution with headquarters in Frankfurt and about a hundred thousand employees in seventy countries.
When it was founded, in , its stated purpose was to facilitate trade between Germany and other countries. It soon established footholds in Shanghai, London, and Buenos Aires. It has operated there ever since. After the deregulation of the U. The assimilation of different banking cultures was not always successful. But as it grew fast it also grew loose. Eric Ben-Artzi, a former risk analyst, was one of three whistle-blowers.
Last year, Deutsche Bank paid the S. Ben-Artzi told me that bank executives had incurred a tiny penalty for a huge crime. Scandals have proliferated at Deutsche Bank. Since , it has paid more than nine billion dollars in fines and settlements for such improprieties as conspiring to manipulate the price of gold and silver, defrauding mortgage companies, and violating U.
Last year, Deutsche Bank was ordered to pay regulators in the U. The Financial Conduct Authority, in Britain, chastised Deutsche Bank not only for its manipulation of libor but also for its subsequent lack of candor. In April, , the mirror-trades scheme unravelled. After a two-month internal investigation, the three Deutsche Bank employees were suspended. One was Tim Wiswell, a thirty-seven-year-old American who was then the head of Russian equities at the bank.
The others were Russian sales traders on the equities desk: Dina Maksutova and Georgiy Buznik. Afterward, Bloomberg News suggested that some of the money diverted through mirror trades belonged to Igor Putin, a cousin of the Russian President, and to Arkady and Boris Rotenberg. They are on the U. According to the U. In June, , with pressure from shareholders intensifying over the mirror trades and other scandals, the co-C.
They were replaced by John Cryan, whose remit was to clean up the bank. That September, he announced the impending close of all investment-banking activity in Russia. By the end of the evening, bankers were dancing on the bar. Many current and former employees of Deutsche Bank cannot quite comprehend how the equities desk in a minor financial outpost came to taint the entire institution. The ostensible function of the Moscow desk was straightforward: The desk had about twenty employees, and included researchers, who analyzed financial data; sales traders, who took calls from clients about buy and sell orders; and traders, who executed the orders.
In the years after the crash, profits plunged by more than half. In this environment of diminishing returns on normal stock-market activity, the Moscow equities desk was looking to find fresh revenue streams. Many businesses in the Russian Federation avoid taxes by using offshore jurisdictions, such as Cyprus, for their headquarters.
Rich Russians, meanwhile, often funnel their private fortunes offshore, in an effort to hide their assets from the capricious and predatory Russian state. Frequently, this fugitive money is invested in assets such as property: The impact of this capital flight is felt at both ends of its journey. But as the ruble and the economy foundered many Russians felt even more eager to remove their money. Mirror trading was an ideal escape tunnel. According to people with knowledge of how mirror trades worked at Deutsche Bank, the main clients who were engaged in the scheme came to the bank in through Sergey Suverov, a sales researcher.
Suverov left the bank soon afterward. He has not been charged with wrongdoing. Initially, the accounts that Volkov handled—funds based in Russia and overseas, with such bland names as Westminster, Chadborg, Cherryfield, Financial Bridge, and Lotus—placed conventional stock-market orders.
But Volkov soon made it clear to his contacts at Deutsche Bank that he wanted to make a large volume of simultaneous trades. He could not be reached for comment. What did Deutsche Bank know about the companies that Volkov represented? Evidently, all the counterparties passed both internal reviews. Deutsche Bank did little to interrogate the source of funds—including those behind Westminster and other Volkov clients. According to people who worked on the desk in , the K.
The Russian equities desk generally had four sales traders who took calls from clients. Two were American, and two—Maksutova and Buznik—were Russian. The sales traders reported to Tim Wiswell, the American in charge of the Russian equities team, and to Carl Hayes, an executive in London. Maksutova was assigned the clients represented by Volkov. Colleagues say that she knew few personal details about Volkov. Antanta Kapital ceased trading in , and Gaydamak was later indicted in Israel for fraud and money laundering.
He received probation, but he recently spent three months in prison, in France, for illegal arms trading. In , top managers at Antanta Kapital formed Westminster Capital Management, which became one of the first major mirror-trade clients.
Four employees at Deutsche Bank in Moscow recall that nobody tried to hide the scheme. Wiswell, Buznik, and Maksutova all met with Volkov, and his orders were discussed openly on the desk. Colleagues also remember that Hayes asked both Buznik and Wiswell about the mirror trades. Within the office, conversations about the trades typically occurred face to face, and videoconferences with colleagues in London were not recorded. Several Deutsche Bank employees in London knew about the mirror trades, even though the orders were taken in Moscow.
The London office executed half the transactions. The trades were also documented by a computer system, called DB Cat, which catalogued every trade made by the bank. Hayes and Koep, the supervisors in London, could call up trading receipts on their computers. Although many people at Deutsche Bank knew about the mirror trades, not everybody was happy about them. In late , Maksutova, the sales trader, went on maternity leave, and Buznik temporarily worked with Volkov.
Buznik became uneasy that Volkov was executing identical buy and sell orders, and twice asked to meet with Wiswell to discuss the propriety of mirror trading. Wiswell assured Buznik that the trades were legitimate, and Buznik did not share his concerns with other managers. Neither Wiswell nor his attorney responded to dozens of requests for comment. One day in , the Russian side of a mirror trade, for about ten million dollars, could not be completed: The Federal Financial Markets Service in Russia had barred two mirror-trade counterparties, Westminster and Financial Bridge, for improperly using the stock market to send money overseas.
The failed trade was a problem for Deutsche Bank. It had paid several million dollars for stock without receiving a cent from Westminster. Employees at all levels of a financial institution notice when a trading desk abruptly falls short by a few million dollars. Employees recall that the failed trade was resolved in November, , when Westminster repaid Deutsche Bank. Volkov resumed calling in mirror trades, on behalf of other counterparties.
But there was a pattern suggesting malfeasance. Clients of the scheme consistently lost small amounts of money: Wiswell, Buznik, and Maksutova also knew that there was a common interest among the counterparties, because many of them were represented by Volkov. But even Deutsche Bank employees who did not work on the desk could have concluded, after a cursory examination, how closely aligned the funds were.