Wow. I don’t know what to say.
I hope he’s insure I guess.
It does not appear that this half billion fraud was a “one and done” incident,
and there is no evidence that only this one buyer was targeted.
Oh oh… not again
The discovery comes just weeks after Trafigura, one of the world’s largest metals traders, unearthed a $577mn nickel fraud that has rocked the commodities industry.
and
The exchange said in a notice to the market on Friday that it had “received information that a number of physical nickel shipments, out of one specific facility of an LME-licensed warehouse operator, have been subject to such irregularities”. The supposed nickel consignments were actually filled with stone, said a person familiar with the matter.
The LME added that the irregularities in the bagged nickel were “evident, from among other things, by the weight of the bags” and it “reminds licensed warehouse operators of the strict requirement to weigh all metal before it is placed” into the exchange’s approved warehouses.
Looks like you were right and this is indicative of a larger fraud and organized operation.
I do find fraud fascinating, not so much the scrotes who prey on the people who can least afford it but the large complex cons that target the wealthy and corporations. Some of them are ingenious.
The show American Greed is fascinating for this very reason.
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Below is a different one is from two years ago. It was “one and done” suspects were arrested quickly enough that the arrest was mentioned in the article. I guess maybe the lack of mentioned arrests/suspects makes me suspect a broader pattern.
Commodities trader Mercuria Energy Group Ltd. struck a deal last summer to buy $36 million of copper from a Turkish supplier. But when the cargoes started arriving in China, all it found were containers full of painted rocks.
The saga unfolds like a gangland thriller, with the Swiss trading house saying it’s been the victim of cargo fraud. Before its journey from a port near Istanbul to China even began, about 6,000 tons of blister copper in more than 300 containers were switched with jagged paving stones, spray-painted to resemble the semi-refined metal.
The bizarre case highlights commodity traders’ vulnerability to fraud, even when security and inspection controls are in place. In 2014 and 2015, Mercuria took provisions to cover potential losses after metal contained in a warehouse in the Chinese port of Qingdao was seized by authorities as part of fraud investigation.
Turkish police took 13 people into custody in relation to the faux-copper scheme.
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The brazenness of it. The sheer audacity. It is breathtaking and appalling at the same time.
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How common is this? 
You really are the financial geek of the forum but we love ya for it.
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In the copper fraud case (two years ago)
—suspects were arrested immediately. It was probably their first time. They didn’t get away with it.
Regarding nickel there is is at least a tiny bit of evidence indicating a pattern.
— first case was 6-7 weeks ago involved Swiss traders buying Nickel from India
— more recent case involves shipments that have been in warehouses, (serving as commodities collateral) for at least a year.
Have you ever had a job where you and all your co-workers knew something for a year, tried to tell your boss for at least a year, but he just had to discover it all on his own?
The Peter Principle applies during speculation bubbles.
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I would think a lot of fraud goes unreported.
If I got scammed like that.
I’d want to keep it quiet . . . or risk losing my investors.
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Well, the bags of rocks (in London) that were painted to look like nickel had an owner.
The owner was JPMorgan. Ouch.
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