quant

You are correct about that. Now that UBS has bought Swiss Bank, they are the largest bank in Switzerland. The guy who was the former district attorney in Switzerland does have a professional relationship with UBS.

So say you are sitting at UBS's home office in Zurich and you open an account. According to the London guy, the attorney will require his name added to the account (which the trader said isn't true). The trader is only authorized to buy high rated paper from one of eight banks, including RBS, Allied Irish, etc. The 1-year-1-day zero coupon bonds are all on Euroclear with ISNs and CUSIP #s.

The only risk is if the bank would default (i.e. go bankrupt), which would be impossible because of the size of the issuing banks. It is true that when banks issue new paper they have to go through an intermediary before it can be sold on a secondary market (e.g. to insurance companies). Although why sell a $1 for 60 to 80 cents (in $100 million tranches)? Of course, perhaps they could be spoofing the credibility of the paper (or its existence) on Euroclear. (Also just the act of providing a mortgage loan creates paper worth 3 times the value of the loan, which is backed by reserves of 1/10th the value, the paper is immediately sold, and then grouped together and eventually ends up in big investment accounts).

The London guy basically said they weren't actually doing anything illegal. The famous race car driver's money is locked up in his account, but it is still there and no trades ever took place. However, the attorney and the trader get a kickback from UBS for bringing such money to them (and probably requiring a certain length of time). He said UBS doesn't care particularly, the contracts don't reference the alleged trades. They just want new accounts.

The US Treasury Dept, et al estimates billions of dollars have been lost to these scams. Some corporations in NY are into related currency swaps in the trillions. In Europe you can greatly leverage your money, which stresses the stability of the entire international financial system. Kind of chaotic and very fragile.

I have NEVER met anyone who has been in a successful trade. Although that private securities attorney in CA claims he has (although his angle is for providing asset recovery services from scams). I am still uncertain about the Zurich trader, but he is likely a fraud. There's only one way to find out and one day I will.

Your new system sounds interesting. I'd like to know more about it when you complete it.