Old Git,

Can you do me a favour and cut and paste the Sunday Telegraph article on Martin Armstrong - he's the guy that just stole 24 million ounces of gold, which dwarfs the bank Of England gold sell-out on Tuesday...

TIA if you can do it :)

-- Andy (2000EOD@prodigy.net), September 20, 1999

Answers

This is from Thursday's edition:

Fraud case shadow over HSBC offer By Andrew Cave in New York

HSBC's $10.3 billion (#6.5 billion) takeover of US bank Republic New York looked increasingly under threat yesterday as further details emerged of a $1 billion securities fraud allegedly masterminded by Republic's client, Martin Armstrong.

Self-styled economics guru Mr Armstrong, 49, the chairman of offshore investment group Princeton Economics International, is charged with defrauding up to 100 Japanese companies of up to $1 billion in a scam involving the issuing of so-called "Princeton notes". The notes were sold from offshore bases in the Turks and Caicos Islands to set up trading funds at Republic's subsidiary Republic New York Securities.

Republic says it had no discretion over the funds, is co-operating with the authorities and has suspended its head of futures, William Rogers, and the brokerage unit's head James Sweeney. However, US authorities have released a copy of one of 200 letters allegedly supplied by Mr Rogers to Mr Armstrong to confirm net asset values of investor sub-accounts.

The letters were used to reassure Japanese investors that the funds were earning substantial rates of return. The published letter states that $12.7m was held in one such fund at the end of June this year.

However, the criminal complaint, filed by the US Attorney for the Southern District of New York and based on a report by FBI special agent Anthony Zampogna states: "In nearly all instances the confirmation letters falsely overstate the value of assets . . . The confirmation letters' overstatement . . . generally ranged from approximately a few thousand dollars to as much as approximately $46m."

The court papers say that under Republic's regulations, Mr Rogers was not authorised to issue such letters, which should be provided by back office personnel or internal auditors. The papers quote Mr Rogers as telling internal Republic investigators that the letters were prepared at the specific request of Mr Armstrong, who accounted for 90pc of his division's business.

Mr Rogers said he did not generally confirm the accuracy of the letters but from time to time noticed discrepancies between the actual net asset values and the values that Mr Armstrong asked to be confirmed. In those instances, he said that he issued the letters with Mr Armstrong's figures but spoke to his client about the discrepancies and requested that funds be transferred from other sub-accounts to make up the values in the letters.

The US attorney says the accounts lost $500m in the 21 months to August this year and that the current value of the cash and trading positions in the Republic accounts is $46m, compared with a face value of the outstanding notes of $700m to $1 billion.

The Securities & Exchange Commission, which has issued a civil lawsuit, says Mr Armstrong made risky bets and lost $295m on trading the yen. Yesterday, Republic's shares took another battering in the market, falling to $57.75 - well below the $72-a-share takeover value.

HSBC says the investigation will further delay the takeover but will not prevent it. Mr Armstrong's lawyer, Marc Durant of Philadelphia law firm Durant & Durant, says his client "vigorously disputes" the allegations and maintains his innocence. He could not be reached for comment yesterday.

-- Old Git (anon@spamproblems.com), September 20, 1999.

Thanks Old Git,

seems like the Telegraph is the only paper doing proper investigative journalism - the article i need i think is only in paper form i'm afraid - thanks again...

-- Andy (2000EOD@prodigy.net), September 20, 1999.

This is another one from the 18th: Armstrong given trade ban in US 10 years ago By Andrew Cave in New York

MARTIN ARMSTRONG, the economic guru charged with a $1 billion fraud through his company Princeton Economics International, was handed a trading ban 10 years ago after crossing swords with the Commodities Futures Trading Commission.

Mr Armstrong, 49, was "sanctioned" after a US administrative law judge in October 1989 upheld a complaint by the commission accusing him and three corporations of conducting a commodity trading adviser business without registration, properly disclosing documents or keeping proper records. He was also found to have engaged in "false, deceptive and misleading advertising" and to have failed to disclose the rebate arrangement with a brokerage.

One advert, in Barron's finance newspaper, declared: "We made $5,000 in September alone" while another boasted: "While everyone was selling the market short we were aggressive buyers and in the past three months we have made $11,500 per contract on the S&P Futures."

The judge found Mr Armstrong liable, issued a "cease and desist" order and a 12-month trading ban, revoked his registration and fined him $24,000. The fine was reduced to $12,000 and the trading ban and registration revocation reversed three years later after an appeal to the commission resulted in a ruling that Mr Armstrong was not individually liable for failing to register, disclose the documents or keep proper records.

The episode is recorded in the criminal complaint lodged against Mr Armstrong by the US Attorney for the Southern District of New York, which states that neither Mr Armstrong nor Princeton are registered as investment advisers with the Securities and Exchange Commission. Mr Armstrong is charged with defrauding Japanese investors of up to $1 billion by issuing "Princeton notes" backed by funds at US bank Republic New York.

Republic's futures head, William Rogers, allegedly provided letters confirming asset values, most of which turned out to be false, and the scandal is threatening Republic's $10.3 billion takeover by HSBC with the shares falling 20pc below the takeover price.

-- Old Git (anon@spamproblems.com), September 20, 1999.

Getting warmer :) the mind boggler was printed in the Sunday Telegraph on the 19th and alledges that he is short some 740 tonnes of gold - which makes the BOE sale look like the teddy bears' picnic...

-- Andy (2000EOD@prodigy.net), September 20, 1999.

Found it!

Last Monday Armstrong was arrested...cheating clients in multi million $ Ponzi scheme aided by Republic New York bank.

Armstrong, Princeton Economics and Princeton Global Mangement also being sued for fraud by the US SEC.

On Thursday, Prineton Global Fund -$14 billion hedge fund based in Bahamas closed down because opf the fall out.

$1 billion owed to Princeton Economics investors.....Armstrong covered losses by co mingling funds.

In addition Armstrong ran up $504 million trading losses.

Owes investors $1 billion compared to $46 million available in account.

Puzzling as to why it took so long for the story to break....FBI raid Armstrong on Sept 2nd, but the story did not break until the 13th Sept.

Profile of Armstrong...No Academic qualifications...member of the Noah Group [anyone?]....Armstrong got most of the markets wrong...long bonds,..short oil, yen and gold....3 out of 4 went against him...the only winner being Gold.

Americas embattled gold bulls believe Armstrong has been a huge short seller of the metal.....'I hate to tell you, but Gold will drop to under $200 until it turns'-Armstrong.... The gold gang retaliated with allegations that Armstrong, the biggest individual Silver trader on the New York Mercantile Exchange is short 24m ounces of gold--a massive 746 tonnes--and it is this that the US authorities have been investigating.

Armstrongs reputation as a guru rested on little more than a style of conviction alarmism. He predicted Yen to collapse to 278, Nikkei to 9700 before it turned, HK dollar to be forced of its peg, Chinese renmimbi to be devalued, Russia would destabalise Europe, Silver to $3,

If Armstrong had been following his own investment advice it is little wonder he appears to have lost so much money.

-- Andy (2000EOD@prodigy.net), September 20, 1999.

Andy, But what is the upshot for the gold market with the Armstrong thing?

-- Mara Wayne (MaraWAyne@aol.com), September 20, 1999.

What bank(s) in New York have Bill and Hillary inversted in?

This one sound familiar.....

-- Robert A. Cook, PE (Marietta, GA) (cook.r@csaatl.com), September 20, 1999.