Economy

Meet The Man Trying To Make London's Bankers "Squeal Like Pigs"

With his proposal to cut bonuses for European bankers, Belgian politician Philippe Lamberts has become public enemy No. 1 for Britain's financial industry. Nothing could make him happier.

London's most hated European MP
London's most hated European MP
Eric Albert

LONDON – A Belgian Member of the European Parliament with a degree in computer engineering, Philippe Lamberts doesn’t look like a man who would terrorize The City. With his sensible haircut and good manners, this father of four is not your run-of-the mill revolutionary intent on bringing the British financial financial center to its knees.

But don’t let appearances fool you. Lamberts, a Green party member first elected in 2009, is the man who infuriated London’s bankers by spearheading the campaign to limit bonuses in Europe. On Feb. 27, the European Parliament and the European Council both agreed to vote on his proposal – starting 2014, EU-wide bonuses will not be able to exceed the total amount of their salary. Shareholders, though, will have the possibility of increasing bonuses to up to twice the amount of the salary.

The Mayor of London Boris Johnson called the bonus cap a “vengeful and self-defeating attempt to pick on London,” and said he was “not going to let it happen.”

Mark Boleat, policy chairman of the City of London Corporation, said it was a “bad business decision,” that would lead to higher fixed salaries. Others –anonymously – threatened to leave for New York or Singapore.

On March 15, Lamberts chose to visit London for his 50th birthday. Upon arrival, he was immediately assailed by media – everyone from the BBC to Sky News and the Financial Times wanted to see the man who brought the bankers to their knees. The chairman of the British Financial Services Authority, Lord Adair Turner and HSBC group chairman, Douglas Flint, both met with Lamberts.

Lamberts is basking in the moment, and not feeling one ounce of regret for what he set in motion. The bankers “are squealing like pigs whose throats are being slit, so I’m guessing the bonus capping will have an impact,” he says, looking quite proud.

“Trail of scandals”

From the beginning, he knew it would be an uphill battle – some of his colleagues were accusing him of populism. “What helped us was that the finance sector had a trail of scandals in its wake,” he says. The European Parliament voted in favor of capping bonuses in May 2012.

The British still believe they can turn things around at the European Council, where they can count on Economy Ministers being more sensible. But that is discounting the fact that these days, no politician in his or her right mind wants to be caught defending banker bonuses publicly. In February, British chancellor George Osborne found himself isolated and incapable of blocking the bill.

Lamberts is not against bankers per se. “I am not the enemy of the City, which is useful to the European economy, as long as it is actually serving the economy,” he says. The son of a small business owner, he’s not allergic to the private sector – far from it, he used to work for IBM. But he accuses banks of being “income-extracting” machines who play on the fact that they are “too big to fail.”

His harsh words are not just for London bankers, he has some choice words for the French financial sector as well: “The clique from Bercy (the French Financial Ministry) make me puke.” He is also very critical of the French banks that are trying to block the separation between retail banking and investment banking that is being discussed in Brussels. His dealings with the financial sector are far from over – his win over bonuses has given him a taste… for blood.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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