THE BANKERS TRUST TAPES

Did John Key, our Smiling Assassin, know about this? Well considering he was working for the Bankers trust at the time and he earned some $ 40.000.000,- in his banking tenure, while moving on to Merrill Lynch to become the head of the department that sold Bonds and Derivatives, the exact same junk that is now causing the sub prime crisis, I would hazard a guess and say he most probably did. The best way to find out though is to ask him directly. So which political party is going take it to the man. More to come (travelellerev.

In just-released court papers, Procter & Gamble lays out racketeering charges against Bankers Trust. The key evidence: Some 6,500 tape recordings

It’s Nov. 2, 1993, and two employees of Bankers Trust Co. are discussing a leveraged derivative deal the bank had recently sold to Procter & Gamble Co. “They would never know. They would never be able to know how much money was taken out of that,” says one employee, referring to the huge profits the bank stood to make on the transaction. “Never, no way, no way,” replies her colleague. “That’s the beauty of Bankers Trust.”

That dialogue was automatically picked up by a Bankers Trust recording system–similar to those at other financial institutions–that routinely tapes conversations involving transactions, mainly to settle disputes over trades. It is part of a mountain of evidence–6,500 tapes, as well as 300,000 pages of written material–that forms the basis of a major legal assault by P&G against the bank. P&G contends that the 1993 conversation is just one of many showing that Bankers Trust deliberately misled and deceived P&G, keeping the company in the dark about key aspects of the derivatives the bank was selling.

Once one of the most powerful, profitable, and aggressive banks in the world, Bankers Trust has been humbled over the past 18 months by a series of debacles in its core derivatives business, with numerous clients of the bank sustaining large losses. P&G took a $102 million aftertax charge for losses on Bankers’ derivatives, perhaps the largest of any of its customers. Several other clients have also sued the bank for losses. And the Securities & Exchange Commission, the Commodity Futures Trading Commission, and the Federal Reserve Bank of New York have all investigated Bankers’ derivatives sales practices and reprimanded or censured the bank.

Procter & Gamble’s fight with Bankers Trust is now taking a new and far more ominous turn for the bank. On Sept. 1, P&G filed a motion with the U.S. District Court in the Western Division of the Southern District of Ohio to add RICO (racketeer-influenced and corrupt organization) charges to its list of allegations against the New York bank and its affiliate, BT Securities Corp. Supporting documents, which contain numerous excerpts of conversations by the bank’s employees, were sealed until Oct. 3. On the same day, district court judge John Feikens approved the P&G RICO motion.

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