Finance

EVER SINCE Hamas’s attacks on Israel a year ago, the biggest fear in oil markets has been that tensions would escalate into a full-blown regional war pitting Israel against Iran, the world’s seventh-largest producer of crude. Until recently both countries seemed keen to avoid it. That explains why, despite war in Gaza and Houthis firing missiles in the Red Sea, initial jitters on oil markets after October 7th last year soon gave way to the low and stable prices that have prevailed for much of this year. More

Crypto relationship scams have become a common type of investment fraud tied to cryptocurrency like bitcoin and ethereum.
Criminals use social media, networking and other sites like Instagram, WhatsApp and LinkedIn to build trust and entice people to buy fake crypto investments, federal officials said.

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Investors are at a heightened risk of cryptocurrency scams tied to fake relationships established over social media, dating apps and networking sites, federal officials warn.
Such frauds occur when scammers use dating apps, social media platforms, professional networking sites or encrypted messaging apps to pose as a romantic interest, old friend, investment professional or other acquaintance.

Fraudsters gain the trust of targets over time. At some point, they broach the idea of investing in crypto — and then defraud victims via fake investments.
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“Relationship investment scams, including those involving crypto asset investments, pose a risk of catastrophic harm to retail investors, and the threat is increasing rapidly as these scams become more popular with fraudsters,” Gurbir S. Grewal, director of the Securities and Exchange Commission’s Division of Enforcement, said in a press statement.
Last month, the SEC brought its first-ever enforcement actions tied to crypto relationship frauds. The SEC alleged criminals pilfered millions of dollars of investors’ money in two separate schemes tied to WhatsApp, LinkedIn and Instagram and fake crypto asset trading platforms NanoBit and CoinW6.

Crypto scam losses ‘can be huge’

Crypto, examples of which includes bitcoin and ethereum, is a digital currency. Its use has grown among criminals, according to the Federal Bureau of Investigation.

Consumers lost an estimated $5.6 billion from crypto-related scams in 2023, up 45% from 2022, the FBI said in a recent fraud report.
Investment scams accounted for about 71% of those total losses in 2023, the agency said.

There are “many variations” of crypto investment fraud, but the most prominent last year was the relationship scam, the FBI said.
“The dollar losses can be huge,” Kim Casci-Palangio, head of the romance scam recovery group at the Cybercrime Support Network, said on a recent podcast published by the Financial Industry Regulatory Authority, a federal brokerage regulator.
“For our program, the dollar losses average about $178,000 a person,” Casci-Palangio said.

These frauds are often ‘long cons’

Criminals have turned to crypto more readily as an outlet for fraud because of its decentralized nature, the speed of irreversible transactions and ability to move money around the world, the FBI said.
Advancements in artificial intelligence will likely make romance scams tied to crypto harder to detect, said Micah Hauptman, director of investor protection at the Consumer Federation of America, a nonprofit consumer advocacy group.
These frauds are often “long cons,” Hauptman said.
Jules, a victim of a crypto relationship scam, detailed her experience with the crime on a new FINRA podcast. FINRA only used Jules’ first name to protect her identity. It’s unclear how much total money she lost, but disclosed it was “thousands of dollars of transactions.”
Jules, who grew up in the Seattle area, began messaging a supposed romantic interest on a dating app in spring 2022 while finishing the final few weeks of her undergraduate degree.

After a “couple of weeks of regular communication” via text, the man “slowly” began to introduce the idea of investing into bitcoin, she said.
“This person was really kind. We had really good interaction,” Jules said. “It started with a friendship. It started with communication. It wasn’t like, ‘Hey, give me your money.'”
The romantic interest — who was a scammer hiding his identity — provided information to build the illusion he was a knowledgeable crypto investor, such as fake screenshots of thousands of dollars in a digital wallet, Jules said.
She took out personal loans to fund crypto investments, she said. Initially, she started with a “little bit” of money,” around $1,000, eventually moving into “larger dollar amounts,” Jules said.

How to protect yourself from crypto scams

Crispin La Valiente | Moment | Getty Images

Here are tips from the FBI, SEC and financial experts on how to protect yourself from crypto romance scams:

Be cautious of investment advice or promotions from someone you meet online and have never met in real life, even if you have spoken on the phone or video chatted — and no matter how trustworthy they seem.
Look out for domain or website names that impersonate legitimate financial institutions, especially cryptocurrency exchanges. Fraudsters often use websites that mimic those of real financial firms (but are often slightly different) to convince people of legitimacy.
Don’t download or use suspicious-looking apps to invest unless you can verify their legitimacy.
If someone is pitching you can investment, don’t gain a false sense of security by being able to make early withdrawals or seeing “profits.”
Beware of fake testimonials from people claiming to have made money.
If an investment sounds too good to be true, it likely is.
Double check that an investment firm is registered on BrokerCheck. More

Starting from Oct. 7, banks will be required to start compensating victims of online fraud a maximum £85,000 in the U.K.
On Thursday, London-based digital bank Revolut accused Meta of falling “woefully short of what’s required to tackle fraud globally” when it comes to tackling fraud.
Tensions have been running high between banks and tech companies for years as financial firms see themselves as bearing the brunt of the cost for scam attacks taking place virtually.

Meta is facing calls from U.K. banks and payment firms like Revolut to financially compensate people who fall for scams on their services.
Jaap Arriens | Nurphoto via Getty Images

Tensions are escalating between banking and payment companies and social media firms in the U.K. over who should be liable for compensating people if they fall victim to fraud schemes online.
Starting from Oct. 7, banks will be required to start compensating victims of so-called authorized push payment (APP) fraud a maximum £85,000 if those individuals affected were tricked or psychologically manipulated into handing over the cash.

APP fraud is a form of a scam where criminals attempt to convince people to send them money by impersonating individuals or businesses selling a service.
The £85,000 reimbursement sum could prove costly for large banks and payment firms. However, it’s actually lower than the mandatory £415,000 reimbursement amount that the U.K.’s Payment Systems Regulator (PSR) had previously proposed.
The PSR backed down from its bid for the lofty maximum compensation payout following industry backlash, with industry group the Payments Association in particular saying it would be far too costly a sum tor the financial services sector to bear.
But now that the mandatory fraud compensation is being rolled out in the U.K., questions are being asked about whether financial firms are facing the brunt of the cost for helping fraud victims.
On Thursday, London-based digital bank Revolut accused Meta of falling “woefully short of what’s required to tackle fraud globally.” The Facebook-owner announced a partnership earlier this week with U.K. lenders NatWest and Metro Bank, to share intelligence on fraud activity that takes place on its platforms.

Woody Malouf, Revolut’s head of financial crime, said that Meta and other social media platforms should help cover the cost of reimbursing victims of fraud and that, by sharing no responsibility in doing so, “they have no incentive to do anything about it.”
Revolut’s call for large tech platforms to financially compensate people who fall for scams on their websites and apps isn’t new.

Proposals to make tech firms liable

Tensions have been running high between banks and tech companies for some time. Online fraud has risen dramatically over the last several years due to an acceleration in the usage of digital platforms to pay others and buy products online.
In June, the Financial Times reported that the Labour Party had drafted proposals to force technology firms to reimburse victims of fraud that originates on their platforms. It is not clear whether the government still plans to require tech firms to pay compensation out to victims of APP fraud.
A government spokesperson was not immediately available for comment when contacted by CNBC.
Matt Akroyd, a commercial litigation lawyer at Stewarts, told CNBC that, after their victory on lowering the maximum reimbursement limit for APP fraud down to £85,000, banks “will receive another boost if their efforts to push the government to place some regulatory liability on tech companies is also successful.”
However, he added: “The question of what regulatory regime could cover those companies who do not play an active role in the PSR’s payment systems, and how, is complicated meaning that this issue is not likely to be resolved any time soon.”
More broadly, banks and regulators have long been pushing social media companies for more collaboration with retail banks in the U.K. to help combat the fast-growing and constantly evolving fraud threat. A key ask has been for the tech firms to share more detailed intelligence on how criminals are abusing their platforms.

At a U.K. finance industry event focusing on economic fraud in March 2023, regulators and law enforcement stressed the need for social media companies to do more.
“We hear anecdotally today from all of the firms that we talk to, that a large proportion of this fraud originates from social media platforms,” Kate Fitzgerald, head of policy at the PSR, told attendees of the event.
She added that “absolute transparency” was needed on where the fraud was occurring so that regulators could know where to focus their efforts in the value chain.
Social media firms not doing enough to combat and remove attempts to defraud internet users was another complaint from regulatory authorities at the event.

“The bit that’s missing is the at-scale social media companies taking down suspect accounts that are involved in fraud,” Rob Jones, director general of the National Economic Crime Centre, a unit of the U.K. National Crime Agency, said at the event.
Jones added that it was tough to “break the inertia” at tech companies to “really get them to get after it.”

Tech firms push ‘cross-industry collaboration’

Meta has pushed back on suggestions that it should be held liable for paying out compensation to victims of APP fraud.
In written evidence to a parliamentary committee last year, the social media giant said that banks in the U.K. are “too focused on their efforts to transfer liability for fraud to other industries,” adding that this “creates a hostile environment which plays into the hands of fraudsters.”
The company said that it can use live intelligence from big banks through its Fraud Intelligence Reciprocal Exchange (FIRE) initiative to help stop fraud and evolve and improve its machine learning and AI detection systems. Meta called on the government to “encourage more cross-industry collaboration like this.”
In a statement to CNBC Thursday, the tech giant stressed that banks, including Revolut, should look to join forces with Meta on its FIRE framework to facilitate data exchanges between the firm and large lenders.
FIRE “is designed to enable banks to share information so we can work together to protect people using our respective services,” a spokesperson for Meta said last week. “Fraud is a multi-sector spanning issue that can only be addressed by working collaboratively.” More

When Michel Barnier, France’s new prime minister, submits his budget to parliament on October 10th he will be doing so against a painful market backdrop. A fortnight ago the yield on French ten-year government debt surpassed that of Spain, suggesting that investors see the euro zone’s second-largest economy as riskier than its southern neighbour’s (see chart 1). That is quite the turnaround. In January Spanish yields were around 0.4 percentage points higher than their French equivalents; at the worst of the euro-zone crisis, the gap was nearer five full percentage points. French borrowing costs are now well above the levels of Portugal and closer to those of Greece and Italy than they are to Germany’s. More

One financial firm is trying to capitalize on preferred stocks – which carry more risks than bonds, but aren’t as risky as common stocks.
Infrastructure Capital Advisors Founder and CEO Jay Hatfield manages the Virtus InfraCap U.S. Preferred Stock ETF (PFFA). He leads the company’s investing and business development.

“High yield bonds and preferred stocks… tend to do better than other fixed income categories when the stock market is strong, and when we’re coming out of a tightening cycle like we are now,” he told CNBC’s “ETF Edge” this week.
Hatfield’s ETF is up 10% in 2024 and almost 23% over the past year.
His ETF’s three top holdings are Regions Financial, SLM Corporation, and Energy Transfer LP as of Sept. 30, according to FactSet. All three stocks are up about 18% or more this year.
Hatfield’s team selects names that it deems are mispriced relative to their risk and yield, he said. “Most of the top holdings are in what we call asset intensive businesses,” Hatfield said.
Since its May 2018 inception, the Virtus InfraCap U.S. Preferred Stock ETF is down almost 9%.

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A day after Meta announced a partnership with U.K. banks NatWest and Metro Bank on a data-sharing framework to help them prevent customers from falling prey to fraud schemes, Revolut said the pact “falls woefully short of what’s required to tackle fraud globally.”
The fintech firm said that Meta and other social media platforms should do their part to financially compensate those who fall victim to fraud on their sites.
Starting from Oct. 7, new payment industry reforms will come into force that require banks and payment firms to issue victims of so-called authorized push payment fraud a compensation of maximum £85,000.

Revolut CEO, Nikolay Storonsky (L) and Meta CEO, Mark Zuckerberg.

British financial technology firm Revolut on Thursday criticized Facebook parent company Meta over its approach to tackling fraud, saying the U.S. tech giant should directly compensate people who fall victim to scams via its social media platforms.
A day after Meta announced a partnership with U.K. banks NatWest and Metro Bank on a data-sharing framework designed to help prevent customers from falling prey to fraud schemes, Revolut said the pact “falls woefully short of what’s required to tackle fraud globally.”

In a statement, Woody Malouf, Revolut’s head of financial crime, said that Meta’s plans to tackle financial fraud on its platforms amount to “baby steps, when what the industry really needs is giant leaps forward.”
“These platforms share no responsibility in reimbursing victims, and so they have no incentive to do anything about it. A commitment to data sharing, albeit needed, simply isn’t good enough,” Malouf added.
CNBC has contacted Meta for comment.
New payment industry reforms will come into force in the U.K. on Oct. 7 that require banks and payment firms to issue victims of so-called authorized push payment (APP) fraud a maximum compensation of £85,000 ($111,000).
Britain’s Payments System Regulator had previously recommended a £415,000 maximum compensation amount for fraud victims, but backed down following backlash from banks and payment firms.

Revolut’s Malouf said that, while his company is on board with steps the U.K. government is taking to combat fraud, Meta and other social media platforms should do their part to financially compensate those who fall victim to fraud as a result of scams originating on their sites.
The fintech firm published a report Thursday alleging that 62% of user-reported fraud on its online banking platform originated from Meta, down from 64% last year.
Facebook was the most common source of all scams reported by Revolut users, accounting for 39% of fraud, while WhatsApp was the second-highest source of such events with an 18% share, the bank said in its “Consumer Security and Financial Crime Report.” More

The career of Andrea Orcel vividly encapsulates the recent history of European banking. At Merrill Lynch, now part of Bank of America, Mr Orcel advised on deals that formed part of the wave of mergers that crested in 2007, when a pan-European troika bought ABN AMRO, a Dutch lender. After the financial crisis of 2007-09, grand cross-border ambitions were ditched. Mr Orcel’s next job was to run the investment-banking arm of UBS, a Swiss champion. More

Between August and October 1943 American warplanes repeatedly bombed Schweinfurt, in southern Germany. The Bavarian town did not host army HQs or a major garrison. But it produced half of the Third Reich’s supply of ball bearings, used to keep axles rotating in everything from aircraft and tank engines to automatic rifles. To Allied planners, who had spent months studying the input-output tables of German industry, the minuscule manufacturing part had the trappings of a strategic commodity. Knock away Germany’s ability to make them, the thinking went, and its military-industrial complex would come crashing down. More