This is the 4th installment of our public service announcements on Deutsche Bank subsidiary, Xetra-Gold’s gold note offerings. Since a lot has been covered already, it’s advisable that you read the first 3 articles to catch up:
- Veritaseum Knowledge Exposes Frightening Counterparty Risk At Deutsche Bank for “Gold Investors”
- Is Deutsche Bank Prepping for Fraud Charges Against It’s Gold Derivative Products?
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The Debate on the Potential of Fraudulent Actions At Deutsche Bank Subsidiary, Xetra-Gold
Now, that we have determined that Deutsche Bank subsidiary Xetra-Gold “may” not have been fraudulent, mainly because they stated in their prospectus things that contradict and befuddle the misleading things they stated in their marketing material, we are left to ponder, “Well, we know the offering was unethical, but was it illegal?” Unfortunately, I’m not a lawyer thus cannot accurately opine on such. Alas, I can speculate as a laymen. The Xetra-Gold derivatives were offered in the UK, as well as several other jurisdictions. Let’s peruse the UK perspective via the FCA in the difference between clear and misleading financial advertising:
“Financial adverts and promotions can be misleading for many reasons, but there are some questions you can consider to help you spot and avoid misleading financial adverts, such as: … Are there important points that are only shown in the small print?”
Hmm… Let’s take a look at the Xetra-Gold advertisement, and cross reference it to it’s prospectus:
You guys tell me, is this a blatant case of false advertising, or is it not? Let me know in the comment section below. It’s not as if DB is totally innocent in these matters, for they just signed a consent order admitting the manipulation of gold prices. This goes deeper than many may care to admit. Deutsche bank seems to be dumping its gold exposure, and what better way to dump it than to sell it unsuspecting gold derivative note buyers. This is how it could be going down…
Deutsche Bank, through it’s Xetra-Gold subsidiary, has a guaranteed, zero premium call option.
- DB/Xetra-Gold accepts money from investors who are told they are buying gold, from “an economic perspective”.
- DB/Xetra-Gold takes money that was supposed to buy gold (at least in the eyes of many investors) and does whatever they want with it (which could include buying gold) because gold delivery on demand is not guaranteed and the investors have been disclaimed against ownership of, and rights to, the gold underlying as well as price correlation, and failure to deliver.
- If the price of gold goes up, DB/Xetra-Gold can fail to deliver (as disclaimed) and keep the capital gains profits. They don’t even have to match the price of the gold underlying. or return the initial investment.
- If the price of gold goes down, DB can deliver gold on demand and keep the spread from gold spot and the price originally charged for the gold notes.
This is good work, if you can get it, no?
This is how a company like DB can have over 90% in profitable trading days, because they never had a chance of losing in the first place. The losses belong to their clients! This is speculation, of course (wink, wink). Now, legal eagles say that we can’t scream fraud, because Deutsche clearly says they have the motivation to, and the ability to, rip you off in their prospectus (but not in their marketing materials).
Which leads us to the end of “The Debate on the Potential of Fraudulent Actions At Deutsche Bank Subsidiary, Xetra-Gold“, where John Titus (see his videos at the end of this article at the bottom) explained to me after I queried about misleading and contradictory marketing materials:
I asked, “If marketing materials are negatively contradicted by the prospectus then the marketing materials are fraudulent and misrepresentative, no?” He replied…
Hmmm… On that note, let’s take a look at whether DB has been a net buyer or net seller of gold exposure. Remember, Goldman, sold MBS structures to clients and then took big short positions betting against their own clients, reference “Goldman ‘bet against securities it sold to clients‘.
The subcommittee also released four internal Goldman Sachs emails. In one, says a subcommittee statement: “Goldman employees discussed the ups and downs of securities that were underwritten and sold by Goldman and tied to mortgages issued by Washington Mutual Bank’s sub-prime lender, Long Beach Mortgage Company. Reporting the ‘wipe-out’ of one Long Beach security and the ‘imminent’ collapse of another as ‘bad news’ that would cost the firm $2.5m, a Goldman Sachs employee then reported the ‘good news’ – that the failure would bring the firm $5m from a bet it had placed against the very securities it had assembled and sold.”
Goldman is fighting to clear its name after the $1bn fraud charges brought by the US Securities and Exchange Commission last week, and wants the case settled in court.
The movie, “The Big Short” dramatized this rather well.
Well, guess what it looks like Deustche has been doing…
Deustche has been a net seller of foreign exchange risk, which includes (wait for it now, and guess….) gold! They probably were not cash sellers, but purchased swaps to reduce exposure, possibly along the parameters I mentioned above with the guaranteed, zero premium call option.
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The post So, If Deustche Bank’s Xetra-Gold Is Not Guilty of Fraud, Is It Guilty of False & Misleading Advertising? appeared first on crude-oil.top.