Innovation/Global Crisis Blog

Delta Force: But This One Kills Good Guys, Not Bad Guys

By Shlomo Maital  

    The arrest of Kweku Adoboli revealed the following practice done by leading global banks, not only by Adoboli’s employer UBS, and its Global Synthetic Trading group.  It is called Delta One.  That’s what Adoboli was doing that lost $2 b.  Here is how this “Delta Force”  works.

   1. Offer clients guaranteed return on their investment.

  2.  Take their money.

  3. Invest their money in higher-risk securities, that pay higher returns, and call it a “synthetic trade” (“Hey, we kind of like maybe bought you 10,000 shares of IBM, but actually we put the money into 100,000 shares of Fly-By-Night Inc., don’t worry, it’s all perfectly safe and legitimate, trust us!”). 

  4. Pay the client their guaranteed return (5%) and pocket the difference between what you actually earned with their investment and what you paid them (20%?  40%).   Except, when you bet wrong and lose the whole wad. 

   Legal?  Sure.  Ethical?  I don’t think so.  More of the same fol-de-rol that ruined the global banks in 2007-8?  Worrisome, on the 3rd anniversary of the collapse of Leyman Bros? 

   Delta Force.  The new version. Brought to you by the same great guys that created Global Crisis 2007 – ? .  The original Delta Force killed bad guys.  This one kills good guys – or at least, their money (OUR money).   Even the original Delta Force wouldn’t be able to overcome the new Delta Force.  It’s armour-plated.