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Barclays’ Busted For Stealing, Selling Confidential Financial Data Of Thousands Of Clients | Zero Hedge
n recent months, the attention of the public has been consumed by concerns over private data abuse by such public spy agencies as the NSA, as well as what personal financial information may have been intercepted by rogue hacker black hats who in the past two months have been blamed for millions in credit card privacy breaches. However, so far there have been two major loose ends in the story of personal data collection (and abuse): just how web search browsers and cookie-based advertising companies collect everything there is to know about the particular interests and desires of any given individual, and just as importantly, how banks abuse client confidentiality by taking the secret financial data of their clients less than seriously.
Today, one of these loose ends got some much needed public exposure after the Daily Mail, of all places, reported that it had been approached by a whistleblower, who revealed that in one of the biggest breaches of bank secrecy, bailed out Barclays had stolen and sold the confidential personal and financial data of up to 27,000 clients to the highest market bidder, in most cases rogue traders who had seen Glengarry Glen Ross one too many times, and who would then use Jordan Belfort-inspired tactics to sell money losing investment products to those unlucky thousands who had entrusted their data to the bank.
Is this the case of yet another “Snowden” growing a conscience and exposing the fraud he had witnessed for all to see? For the time being, it sure looks like it: “This is the worst [leak] I’ve come across by far,’ said the former commodity broker and whistleblower. ‘“But this illegal trade is going on all the time in the City. I want to go public to stop it getting bigger.”
Barclays Bank is reeling from an unprecedented security breach after thousands of confidential customer files were stolen and sold on to rogue City traders.
In the worst case of data loss from a British High Street bank, highly sensitive information, including customers’ earnings, savings, mortgages, health issues and insurance policies, ended up in the hands of unscrupulous brokers. The data ‘gold mine’ – also containing passport and national insurance numbers – is worth millions on the black market because it allowed unsuspecting individuals to be targeted in investment scams.
Barclays last night launched an urgent investigation and promised to co-operate with police.
It is not clear how the records were stolen, but the bank could face an unlimited fine if found guilty of putting customers’ details at risk. The leak was exposed by an anonymous whistleblower who passed The Mail on Sunday a memory stick containing files on 2,000 of the bank’s customers.
He claimed it was a sample from a stolen database of up to 27,000 files, which he said could be sold by shady salesmen for up to £50 per file.
Of course, Barclays has had its share of legal troubles in recent years, having been exposed as the first bank in the still growing Libor-rigging scandal for which is was fined GBP290 million, and now this data loss, which is a breach of its obligations under the Data Protection Act to keep personal information secure, will almost certainly cost its many more hundreds of millions in legal fees and damages.
The sources of the breached and stolen files was data collected from customers who had sought financial advice from the bank, and passed on their details during meetings with an adviser. The consultations included filling out questionnaires – or ‘psychometric tests’ – which revealed their attitude to risk. That information could be exploited to persuade victims to buy into questionable investments.
One could call them, the “Glengarry leads”, and an example of one is shown below:
But while Barclays collecting detailed data about its clients is perfectly normal, what it did next is criminal:
The whistleblower first became aware of the Barclays leads in September when the boss of the brokerage firm asked him to sell them to other traders. ‘The obvious question I asked was, “These are fantastic leads, why are you not using them yourself?”
‘He replied, “We have – sell it as secondary data.” He had got all he could out of them. New, they were worth £50 per file. He asked us to sell for £8.’
The whistleblower showed the leads to a select group of brokers ‘who thought they were amazing’, but eventually decided not to sell.
‘My conscience got the better of me. It was all just so wrong,’ he said. ‘I wasn’t a broker myself at this stage, but I had a business link to the firm.’
Between December 2012 and September 2013 the firm persuaded victims to buy rare earth metals that did not exist, it is claimed. The whistleblower estimates up to 1,000 people could have been ‘scammed’.
Then the party was over as quickly as it started:
When the investors began to suspect they were being fleeced he said the boss chose to ‘shut the trading floor’.
‘His orders were to get rid of the evidence, to show that we were never there. We bleached the desks so his DNA was not in the office. We destroyed his laptop and 15 bags of paperwork. We wiped the computers. During this fiasco he asked me, “Have you got the Barclays leads?” I said, “No, I haven’t, they must have been destroyed”. ‘But I kept them because I thought the whole thing had gone too far. I want to stop it now, to tell people what was happening.’
Alas, the burning down of the crime scene was not enough, and now that Barclays has been exposed, the damage control begins:
Barclays said in a statement: ‘We are grateful to The Mail on Sunday for bringing this to our attention and we contacted the Information Commissioner and other regulators on Friday as soon as we were made aware. ‘Our initial investigations suggest this is isolated to customers linked to our Barclays Financial Planning business, which we ceased in 2011.
‘We will take all necessary steps to contact and advise those customers as soon as possible so that they can also ensure the safety of their personal data. ‘Protecting customers’ data is a top priority and we take this issue extremely seriously. This appears to be criminal action and we will co-operate with the authorities on pursuing the perpetrator.
‘We would like to reassure all of our customers that we have taken every practical measure to ensure that personal and financial details remain as safe and secure as possible.’ The Mail on Sunday has arranged to pass on the data to the Information Commissioner’s Office. A spokesman said: ‘We’ll be working with The Mail on Sunday this week as well as working with the police.’
That’s not all: we also learn that the legacy of the Wolf of Wall Street is alive and well. So alive in fact, he has been in ongoing consultations on how to cold call clients about which the sellers already knew everything in advance:
Brokerages want to hire people who are money-oriented, articulate and who speak the Queen’s English. Their ideal is the young, hungry white guy. They want the most aggressive person, very manipulative and bullish, almost like a New York broker in the 1980s.
In the first interview they would ask: ‘Do you **** whores and sniff coke? Do not come and work here if you don’t.’ They might even ask the interviewee to sing a song. They want to see if they can bend them over a barrel and get them to do what they want. Out of 10,000 brokers, 9,000 will be earning below the minimum wage. The majority will never succeed. The successful ones do not have a moral compass.
Most people drop out after a couple of years because they burn out but I know old school brokers who’ve done it since the 1980s.
We got trained by Jordan Belfort, the real-life Wolf of Wall Street. It cost £38,000 for an hour’s conference call with him from New York. Three different firms took part and there were 40 brokers in the room, sitting around a phone.
He’s big on ‘rapport building’. He shows how to apply pressure in the right places – how to manipulate people in a controlled way. In all cases, brokers try to find the person’s motive for investing. When trust is established it’s very easy to make the ale or ‘load’ a client with a commodity. Loaders are a breed of broker and some can earn 40 per cent a deal on just the commission.
A lot of contracts between broker and investor include ‘exit confirmation’ – the date when the return on investment is expected. But in many cases those clauses are a lie. A month or two before the exit strategy is due, the firm winds up and disappears.
The owners – criminals in sharp suits – will set up shop, trade for a bit, then the company will close, only for the brokers to open another one.
The next day they ring the same clients, but with different voices on the end of the phone. You might use a different name – nobody uses their real name. Many on the Barclays list were born in the 1930s. Old people are perfect targets because they are more trusting and they haven’t got long left. You hope they die before your exit strategy comes up.
Hopefully this anecdote serves to illustrate the link between insolvent but bailed out and cash-strapped banks, boiler rooms, and criminal salespeople.
Finally, it goes without saying, that if this is happening in the UK it most certainly taking place in the US as well. And as a follow up – while the general public has every right to be concerned about how its private data is being abused by public spy entities such as the NSA, perhaps it is time to inquire just how it may be abused not only by private banks such as Barclays, but by all those private corporations who interact daily with the countless users who share their data on the Internet assuming that it won’t be used in a criminal fashion by virtually everyone.
the fifth estate
Linden MacIntyre has been a co-host of CBC Television’s the fifth estate since 1990.
- 10 whistleblowers and the scandals they spurred
- Snowden case: Has Obama broken pledge to protect whistleblowers?
- Bradley Manning seeks presidential pardon for data leak
- Timeline: Edward Snowden
- Julian Assange: the man behind WikiLeaks
- NSA spying threatens to undermine U.S. foreign policy
- Database: Text of Canadian cables in WikiLeaks
- Brian Sinclair is Why We Need Medical Whistleblowers
The conscientious public servant, having agreed verbally with the reporter that the conflict of interest in his department is egregious, has privately explained how it works – and has now nervously consented to make available a document that will authenticate the story. There is a brief encounter in a busy public square. An envelope appears out of one briefcase, disappears into another. A silent whistle has been blown.
That was an actual transaction that occurred on an overcast autumn day in 1977. A crooked mayor lost his job because of it.
the fifth estate
This week on the fifth estate: “The Strange World of JulianAssange.” The controversialWikiLeaks founder gets the Hollywood treatment in the new movie ‘The Fifth Estate’. Watch CBC Television’s the fifth estate this Friday, Nov. 1, for the inside story of JulianAssange in his own words.
It’s a scenario that has played out many times. A provincial cabinet minister once handed me a devastating analysis of a hugely expensive public project. I had it for a weekend, it was about 150 pages long. Trusted friends and I laboriouslycopied the entire document on a typewriter before I gave it back – and started to report its contents.
Another leak: an associate in Ottawa drove to a residential address where, by arrangement, an envelope was recovered from a private mailbox. The document retrieved from that mailbox was instrumental in derailing a secret process to licence an agricultural drug of dubious value and demonstrated peril.
That’s the way the whistle blew in “the old days.” Now the revolution in technology has simplified the process and amplified the whistle to a degree that would have been unimaginable even 20 years ago.
‘Even the agencies of espionage are now publicly accountable for their tactics – all because a young civilian named Edward Snowden found some of their activities abusive and corrupt.’
The secret diplomatic pouch is now potentially transparent, as demonstrated by an outraged U.S. army private, Bradley/Chelsea Manning, who co-operated with Julian Assange and Wikileaks to blow the whistle on a global scale. And even the agencies of espionage are now publicly accountable for their tactics – all because a young civilian named Edward Snowden found some of their activities abusive and corrupt.
The names Assange, Manning and Snowden are associated with a transformation in the vulnerability of institutions in both the public and private realms.
Institutions gather, store and analyze vast amounts of information about individuals and other institutions. The process, even when intentions are benign, is nonetheless invasive.
The purpose of the information gathering is, in one rendering, to protect us from each other and ourselves. But it is also for the purpose of manipulation, to influence how we vote and spend and think. And so, people of a certain moral profile who have access to the information will be offended and some will risk liberty and life to let us in on what the institutions know about us.
That’s the way the world has worked since people first discovered the utility of information and the power of secrecy. In a memorable scene from the movie The Fifth Estate, a journalist opines that speeches in the British House of Commons were once so secret that people caught leaking them to the public were hanged for it. Not exactly true – but the Commons debates were conducted secretly, and people went to prison for reporting them in pamphlets. Public outrage, fired by whistleblowing, eventually put a stop to secrecy in parliament.
The modern pamphlet is a blog or tweet, the brown envelope is now a tiny thumb-drive with the information-carrying capacity of a truckload of paper documents. And from the opposing perspective, technology has also enabled institutions to delve deeply into private lives for law enforcement, commerce and the vague new project known as “public safety”.
‘The human tendency to be offended by abuse – torture in a secret prison, a lie told under oath to fool the public, squandering of public treasure – remains a vital force in conscientious people.’
Technology has changed, but human nature hasn’t and that’s a good thing. The human tendency to be offended by abuse – torture in a secret prison, a lie told under oath to fool the public, squandering of public treasure – remains a vital force in conscientious people.
And we witness their responses with sufficient frequency to remind the advocates and practitioners of secrecy that they are vulnerable, too. They’re at the mercy of basic human instincts (be they narcissistic or humanitarian), and the technology that makes their secrets more accessible and portable than at any other time in human history.
The furious response to Manning and Wikileaks and Snowden underscores the impact of the message in their actions just as it obscures a fundamental question: Why did they do what they did and for whose benefit?
There was no possibility of personal gain and almost certainly they faced the prospect of severe punishment. They have been accused of recklessness and treachery. Extremists have called for their deaths. Manning will spend decades in prison. Both Julian Assange and Edward Snowden are fugitives from a prosecution that would be familiar to a Guantanamo detainee.
Maybe they were delusional. But the information inherent in the act of whistleblowing is perhaps more useful than the sordid details in the documents they leaked.
What we know shapes what we think. What we think determines our behaviour. There will always be clandestine efforts to manage what we think and thus control how we behave as consumers and as citizens. But there is also a fundamental human impulse to resist manipulation and, because secrecy is essential to manipulation and control, there will always be individuals who will rebel against it.
The English philosopher Jeremy Bentham put it strongly – but his words have been embraced in principle and often quoted by politicians and jurists while making and interpreting our laws: “In the darkness of secrecy, sinister interest and evil in every shape have full swing.”
In another essay more than 200 years ago, Bentham said, “Secrecy, being an instrument of conspiracy, ought never to be the system of a regular government”.
Those are words that whistleblowers live by, which makes them auditors of governance and guarantors of our democracy.
[This week on the fifth estate: “The Strange World of Julian Assange.” The controversial WikiLeaks founder gets the Hollywood treatment in the new movie ‘The Fifth Estate.’ Watch CBC Television’s the fifth estate this Friday, Nov. 1, for the inside story of Julian Assange in his own words.]
- Whistleblowers should be protected, not prosecuted 30/09/13 (angrybeardyleftydude.wordpress.com)
- Julian Assange, Glenn Greenwald, Alexa O’Brien, David Coombs: The War on Whistleblowers and Their Publishers (dandelionsalad.wordpress.com)
Veteran New York Times Reporter: “This Is Most Closed, Control-Freak Administration I’ve Ever Covered” | Washington’s Blog
Seasoned CBS News Anchor: “Whenever I’m Asked What Is The Most Manipulative And Secretive Administration I’ve Covered, I Always Say It’s The One In Office Now”
American constitutional experts say that Obama is worse than Nixon.
The government has taken to protecting criminal wrongdoing by attacking whistleblowers … and any journalists who have the nerve to report on the beans spilled by the whistleblowers. (The government has also repealed long-standing laws against using propaganda against Americans on U.S. soil, and the government is manipulating social media – more proof here and here).
The Obama administration has prosecuted more whistleblowers than all other presidents combined.
- Obama’s ATF Trying to Silence Fast and Furious Whistleblower (breitbart.com)
- CBS’ Anchor: ‘Most Manipulative and Secretive’ Administration Ever (independentsentinel.com)
- Norman Solomon: Repression of Whistleblowers: Making It Easier to Attack Syria (huffingtonpost.com)
- Snowden to EU: Whistleblowers need protection (euobserver.com)
Karen Hudes is a graduate of Yale Law School and she worked in the legal department of the World Bank for more than 20 years. In fact, when she was fired for blowing the whistle on corruption inside the World Bank, she held the position of Senior Counsel. She was in a unique position to see exactly how the global elite rule the world, and the information that she is now revealing to the public is absolutely stunning. According to Hudes, the elite use a very tight core of financial institutions and mega-corporations to dominate the planet. The goal is control. They want all of us enslaved to debt, they want all of our governments enslaved to debt, and they want all of our politicians addicted to the huge financial contributions that they funnel into their campaigns. Since the elite also own all of the big media companies, the mainstream media never lets us in on the secret that there is something fundamentally wrong with the way that our system works.
Remember, this is not some “conspiracy theorist” that is saying these things. This is a Yale-educated attorney that worked inside the World Bank for more than two decades. The following summary of her credentials comes directly from her website…
- NWO – World Bank Whistleblower Karen Hudes Reveals How The Global Elite Rule The World (sallypoliticalpage.wordpress.com)
- How The Global Elite Rule The World (tomohalloran.com)
- Bradley Manning faces life in jail: an ugly moment in US history (theweek.co.uk)
- Manning helped pierce the veil of secrecy in Guantanamo (rt.com)
- Infographic: Is Bradley Manning A Hero Or A Traitor? (theonion.com)
- ‘Traitor Or Hero?’ Asking The Wrong Questions About Manning And Snowden (forbes.com)
- Statement by Julian Assange on Verdict in Bradley Manning Court-Martial (economicpolicyjournal.com)
- Bradley Manning is no traitor but he must still go to jail (thetimes.co.uk)
- 6 Whistleblowers Who Turned Out To Be Right After Being Ignored (huffingtonpost.com)
- Facebook Censors State Rep. Who Encouraged Whistleblowers (secretsofthefed.com)
- Whistleblower debate starts today – no protection for whistleblowers who were perpetrators or accomplices (timesofmalta.com)
- The Watergate of Whistleblowers that could bring down Hillary Rodham Clinton (canadafreepress.com)
- Snowden spying revelations vindicate ten years of NSA whistleblowing (vancouverobserver.com)
- John Cusack goes off about NSA coverage (politico.com)
- Greenwald: “World will be Shocked” Concerning Next Release of NSA Spying Activity (darkgovernment.com)
The Whistleblower’s Guide To Secretly Tipping Off The Press In A “Turnkey Totalitarian” State | Zero Hedge
- America Is At The Precipice Of Turnkey Totalitarianism by Julian Assange (zcommunications.org)
- Your CRIMINAL Gov’t: White House Defends Its Wiretapping Of Millions Of US Citizens (sgtreport.com)
- Turnkey totalitarianism (salon.com)
- The spy who came in for your soul – ” We are, like, that far from a turnkey totalitarian state.” (engineeringevil.com)
- Assange: America is at the Precipice of Turnkey Totalitarianism (counterinformation.wordpress.com)
- Watergate Was For Amateurs: Justice Department Spied For Months On Associated Press Reporters (flyoverpress.wordpress.com)
- Canadian Company SNC-Lavalin Offers Amnesty to Whistleblowers (goldenageofgaia.com)
- USA National Security Agency Spies on You (netnewsledger.com)
- Protest and Resistance against America’s Police State: What’s Your Breaking Point to Take Action? (rinf.com)