The Bank Account That Sprang a Leak
By DIANA B. HENRIQUES August 30, 2008
They are a staple of consumer-complaint hotlines and Web sites: anguished tales about money stolen electronically from bank accounts, about unhelpful bank tellers and, finally, about unreimbursed losses.
But surely customers of the elite private banking operation at JPMorgan Chase, serving only the bank's wealthiest clients, are safe from such problems, right?
Wrong, says Guy Wyser-Pratte, an activist investor on Wall Street for more than 40 years who uses his hedge fund's war chest of roughly $500 million to wage takeover fights and proxy battles in the United States and Europe.
In May, Mr. Wyser-Pratte learned that someone had siphoned nearly $300,000 from his personal account at the private bank through many small electronic transfers over a 15-month period. Then he was told by the bank that he could stop the theft only by closing his account and opening a new one - an enormous hassle, he said. And finally, JPMorgan Chase told him that the bank would cover only $50,000 of his losses.
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As I've said before, Monty gets slightly more lattitude when it comes to my decisions about what is and is not related to telecom. I'm allowing this post because it relates to the discussion we need to have about the affect of international telecommunications on the lives of "western world" Internet users.
Everything form the "419" scammers to a company such as Ebay depends on the existence of not only the Internet, but the change in world-view which precedes acceptance of online banking, i.e., ordinary people being willing to trust their money to the good faith and (assumed) competence of companies outside the traditional banking industry. That change has been conducted without any meaningful supervision or regulation, and it has allowed third parties such as PayPal to gain world-class economic clout by profiting from the electronic transfer of money, without government safeguards or oversight.
Bill Horne Temporary Moderator
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