Next Stop: India, as the Reach of Global Finance Grows

When I first went to India, the City Bank representative was proud to point out to me that I could use my ATM card in 8 ATM machines in (wait for it) the Country. I found the one in Delhi.

Now, I wonder if the SEC can reach cases of fraud in foreign lands.

Today, we have the Economic Times report on a ban scam conducted by a Kolkata based firm. I do not pretend to understand the law of India, nor necessarily very much about this case, but it does show that the urge to commit fraud is not confined to the U.S. Allegedly, the Defendants used inflated and fabricated stock statements, and diverted funds which should have gone through the bank. (UCO Bank lost Rupees crore 231.95) A crore equals 10 million rupees, or approximately $140 thousand dollars, meaning this was almost a $32.5 million scheme. This, my friends, shows that there’s almost no such thing as small investor fraud.

What intrigued me about this story all the way from India was the little notation that the bank is publically traded on the NSE (India’s Exchange) and on the BSE (Bombay Stock Exchange). UCO is a pretty big bank with “overseas business”. Alas, the bank does not trade its shares in the U.S. nor issue American Depository receipts, so this case would not have been filed under the Security Exchange Commission’s Whistleblower Program, but you have to wonder how long that will continue. As I mentioned, when I first went to India, just using an ATM with an American account was an adventure. What about now?

It is worth remembering that you need not be a United States Citizen to file a form TCR with the SEC. This is the form that you have to file to establish a claim with the SEC, and by the way, you can file it anonymously if you have (ahem) counsel. Here’s an Indian Bank, and although I have no knowledge of Indian law or Indian banking regulations, the bank’s 2019 Annual report looks pretty much like any such report. As banks get bigger and business becomes more global, sooner or later even more firms based abroad will seek capital here in the U.S. There have been moves abroad with the E.U. potentially creating whistleblower legislation. Here’s hoping more countries adopt the SEC standards and the protection of investors is an impetus to protect whistleblowers (who are the only people in a position to provide the information that really would protect investors) is adopted nationwide.

It might just have helped the UCO bank catch this fraud sooner if a whistleblower could have come forward and filed with the SEC and obtained a reward. If such a bank is traded in the U.S. and subject to SEC regulation, that can happen.

Tony Munter Whistleblower Attorney

Tony Munter Attorney at Law
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Washington DC  20004