Wednesday, March 2, 2016

ISIS Earns Millions Skimming Forex, Trading Equities

From The Telegraph:

Group using cash looted from banks in Mosul to speculate on international currency markets
Playing the stock market: Islamic State leader Abu Bakr al-Baghdadi
Chief Investment Officer Al Baghdadi on the squawkbox
Isil is making millions of dollars for its war chest by playing foreign currency markets under the noses of bank chiefs, it was revealed today.

The terror group is earning up to $20m (£14.29m) a month by funnelling dollars looted from banks during its takeover of the Iraqi city of Mosul into legitimate currency markets in the Middle East.

It then makes huge returns on currency speculation, which are then wired back via unsuspecting financial authorities in Iraq and Jordan, a parliamentary committee was told on Wednesday.

Islamic State of Iraq and the Levant's (Isil) extraordinary venture into white collar crime is now a major source of income, along with oil smuggling and extortion from people living in Isil-controlled areas. 
Details of the scam emerged during a hearing of a specially-convened Foreign Affairs sub-committee set up to examine Britain's role in Isil financing.

The hearing was told that Isil finance chiefs would play the international stock markets using cash looted during their 2014 take over of Mosul, in which the group got its hands on an estimated $429m from the city's central bank.

They also used money "siphoned off" from pension payments that are still being made by the Iraqi government to civil servants living in the city.

The details were revealed to the hearing by John Baron, the sub-committee's chair, who demanded to know whether the British government - which has pledged to help cut off Isil's finance networks - was taking proper action against it.

"The cash that Isil has looted, along with siphoned off pension payments, is routed into Jordanian banks and brought back into the system via Baghdad," he said. "That allows the system to be exploited by Isil, in that they take a turn (profit) on the foreign currency actions and siphon that cash back."...MORE
Back in 2014 the Financial Times said the central bank rip-off was fiction:

Biggest bank robbery that ‘never happened’ – $400m Isis heist
By Borzou Daragahi in Cairo
It was described as one the biggest heists in the history of bank robbery: more than $400m reportedly stolen from Mosul financial institutions by the Islamic State of Iraq and Levant, known as Isis, as it seized control of Iraq’s second-largest city of Mosul last month. 
But Iraqi bankers in Mosul and the capital, Baghdad, are saying the robbery never took place and that the cash remains inside the vaults of the city’s banks.
“We have been following up on this question of the stolen money since the beginning of the crisis,” Abdul-Aziz Hassoun, executive director of the Iraqi Private Banks League, told the Financial Times during a recent meeting in Baghdad. 
“We speak to the banks there all the time. We have been informed that all are guarded from the outside by their own guards and that nothing has been removed from the premises of any banks, not even a piece of paper.” 
Reports that Isis had stolen 500bn Iraqi dinars ($430m) from Mosul financial institutions as the Islamist group and its Sunni insurgent allies seized control of the city more than a month ago raised alarm bells in the west and throughout the region, amid concern over the ambitions and growing capacity of extremist Islamists. 
Iraq officials, including one-time CIA asset and lawmaker Ahmed Chalabi, described the alleged bank heist in comments cited by Iraqi and international media.But Atheel al-Nujaifi, governor of Nineveh province, which includes Mosul, rejects the stories of vast sums of money being taken away by militants....MORE
So now I don't know what to believe.
I so wanted ISIS Investments Ltd. to be outperforming the average long/short global macro/FX guy.