ALEX BRUMMER: Trump fraud trial does more harm than good to financial justice

The financial world has its eyes firmly focused this week on the trial of alleged cryptocurrency fraudster Sam Bankman-Fried and his exchange FTX.

The case has attracted particular attention due to the sympathetic approach to the Bankman-Fried story taken by writer Michael Lewis.

He is a specialist in unraveling the character of the weirdos who operate on the margins of 21st century finance.

Equally fascinating is the civil fraud trial in another Manhattan courtroom.

Donald Trump is accused by New York State Attorney General Letitia James of “grossly” inflating his assets to impress Forbes magazine and obtain better terms from bankers.

The goal is to strip Trump of his property and exclude him and his family from doing business in New York.

Few dispute that Trump is a malevolent influence on American politics and that the law must be applied when it comes to his efforts to derail the democratic process.

However, there is something curious about the Manhattan civil trial. No one who has followed Trump could have any doubts about his self-aggrandizement.

The tendency to exaggerate the magnitude of their assets will not be surprising. More disconcerting is that the personal assessments were accepted by Deutsche Bank, which granted loans to the former president’s companies.

Although the basis on which these assessments were accepted has not been revealed.

First, property values ​​go up and down like a yo-yo, which is why, in times of rising interest rates, bargains can be found.

Second, while Forbes may not need to audit wealth when compiling its list of billionaires, it would be unthinkable for banks, auditors and lawyers to take DIY valuations of trusts. Independent appraisers verify what the borrower or seller has to say.

If Trump was providing dodgy data, it’s your job to find it out. As anyone who buys or sells a home knows, valuations are up to the viewer and vary widely.

Some of this is a reminder of retailer Philip Green’s fights in the Commons over the sale of BHS to Dominic Chappell – later convicted as a tax offender – which was approved by the City establishment.

To be sure, bullies like Trump can exert undue influence over professional advisors. But as Judge Engoron stated, the “inflation” of values ​​and measures in the Trump case does not appear “to have created losses for creditors.”

It is quite possible that surreptitious payments were made to advisors who allowed distorted values ​​to be attributed to the transactions.

But this misdirected Trump fraud trial does more harm than good to financial justice. The focus should be on actual white-collar crime charges, such as those against Bankman-Fried.

fashion victim

Most of the concerns about online fast fashion company Boohoo have revolved around executive greed, business-to-business transactions and poor factory conditions.

Founders Mahmud Kamani and Carol Kane were able to navigate turbulent waters because investors fell in love with the durability of their online model during the pandemic.

Boohoo even had enough confidence to snap up totemic brands Karen Millen and Debenhams when High Street went horribly wrong.

Now doubts are arising about the durability of your model. The group continues to make underlying profits.

The margins, although small, appear quite solid. Sales are a different topic. Despite inflation, revenue is expected to fall between 12 and 17 percent in the year to February, down from a previous projection of 5 percent. After another drop, shares are more than 90 percent off their 2020 high.

Compare Boohoo to ABF-owned Primark, where stores are packed and sales are up 15 per cent in the year to September. The return of physical fashion can also be seen at M&S, where Jaeger has re-emerged as an affordable luxury brand.

Frasers remains behind the scenes as a strategic shareholder with a 10% stake. Could Mike Ashley want more than just a bite?

Drug wars

American patients and class action lawyers are smart about extorting Big Pharma.

AstraZeneca is shelling out £350 million to resolve allegations that it failed to alert consumers about the risk of chronic kidney disease due to its reflux drug.

Nexium is still available in Boots and for consumers of its prescription equivalent, omeprazole (like this author), these results never inspire confidence.

When it comes to health, financial arrangements should never be considered just another cost of doing business.