Wednesday, 07 December 2022

A Analysis

Reggie Middleton

Reggie Middleton

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This is the 4th installment of our public service announcements on Deutsche Bank subsidiary, Xetra-Gold's gold note offerings. Since a lot has been covered already, it's advisable that you read the first 3 articles to catch up:

  1. Veritaseum Knowledge Exposes Frightening Counterparty Risk At Deutsche Bank for "Gold Investors"
  2. Is Deutsche Bank Prepping for Fraud Charges Against It's Gold Derivative Products?
  3. The Debate on the Potential of Fraudulent Actions At Deutsche Bank Subsidiary, Xetra-Gold

Now, that we have determined that Deutsche Bank subsidiary Xetra-Gold "may" not have been fraudulent, mainly because they stated in their prospectus things that contradict and befuddle the misleading things they stated in their marketing material, we are left to ponder, "Well, we know the offering was unethical, but was it illegal?" Unfortunately, I'm not a lawyer thus cannot accurately opine on such. Alas, I can speculate as a laymen. The Xetra-Gold derivatives were offered in the UK, as well as several other jurisdictions. Let's peruse the UK perspective via the FCA in the difference between clear and misleading financial advertising:

"Financial adverts and promotions can be misleading for many reasons, but there are some questions you can consider to help you spot and avoid misleading financial adverts, such as: ... Are there important points that are only shown in the small print?"

Hmm... Let's take a look at the Xetra-Gold advertisement, and cross reference it to it's prospectus:

DB Xetra-Gold false advertising test

You guys tell me, is this a blatant case of false advertising, or is it not? Let me know in the comment section below. It's not as if DB is totally innocent in these matters, for they just signed a consent order admitting the manipulation of gold prices. This goes deeper than many may care to admit. Deutsche bank seems to be dumping its gold exposure, and what better way to dump it than to sell it unsuspecting gold derivative note buyers. This is how it could be going down...

Deutsche Bank, through it's Xetra-Gold subsidiary, has a guaranteed, zero premium call option.

  1. DB/Xetra-Gold accepts money from investors who are told they are buying gold, from “an economic perspective”.
  2. DB/Xetra-Gold takes money that was supposed to buy gold (at least in the eyes of many investors) and does whatever they want with it (which could include buying gold) because gold delivery on demand is not guaranteed and the investors have been disclaimed against ownership of, and rights to, the gold underlying as well as price correlation, and failure to deliver.
  3. If the price of gold goes up, DB/Xetra-Gold can fail to deliver (as disclaimed) and keep the capital gains profits. They don't even have to match the price of the gold underlying. or return the initial investment.
  4. If the price of gold goes down, DB can deliver gold on demand and keep the spread from gold spot and the price originally charged for the gold notes.

This is good work, if you can get it, no? 

This is how a company like DB can have over 90% in profitable trading days, because they never had a chance of losing in the first place. The losses belong to their clients! This is speculation, of course (wink, wink). Now, legal eagles say that we can't scream fraud, because Deutsche clearly says they have the motivation to, and the ability to, rip you off in their prospectus (but not in their marketing materials).

DB

Which leads us to the end of "The Debate on the Potential of Fraudulent Actions At Deutsche Bank Subsidiary, Xetra-Gold", where John Titus (see his videos at the end of this article at the bottom) explained to me after I queried about misleading and contradictory marketing materials:

I asked, "If marketing materials are negatively contradicted by the prospectus then the marketing materials are fraudulent and misrepresentative, no?" He replied...

Misrepresentative, yes (accepting your definition of economic), and the marketing materials probably do in fact flout any number of laws against false advertising.
 
But fraudulent, no. The essence of fraud is to falsely induce someone by words or acts into doing something against his interests that he wouldn't have done but for the dishonesty. Courts consider the totality of the circumstances. So while you would undoubtedly tear the economic investment statement to shreds, you'd still be left with the many other statements from the prospectus that are true, and herein lies the problem.
 
The UK Fraud Act of 2006 is a criminal statute. So each element of the crime has to be proved beyond a reasonable doubt (or whatever the English equivalent burden of proof is). The first element of fraud by false representation under the Act is "dishonestly makes a false representation." The problem posed by the prospectus is that it would preclude a finding that DB acted dishonestly beyond a reasonable doubt. I mean, you've got one false (but arguably vague) statement vs. several clear-cut disclaimers that are accurate. The totality of the statements are perhaps half false and half true, but dishonest beyond a reasonable doubt? Fuhgetaboutit. DB played the game with all of its cards face up. Yeah, they contradicted each other, but they were damn sure visible to investors, who can claim they were misled only in a subjective (personal) sense, not in an objective way (which is how a judge would look at it).
 
Now, if--in addition to the mktg mat's and the prospectus--you've got some Goldman-like behavior where DB took out massive insurance policies on the investments it sold and concealed them from the buyer, it's a totally different story."

Hmmm... On that note, let's take a look at whether DB has been a net buyer or net seller of gold exposure. Remember, Goldman, sold MBS structures to clients and then took big short positions betting against their own clients, reference "Goldman 'bet against securities it sold to clients'.

The subcommittee also released four internal Goldman Sachs emails. In one, says a subcommittee statement: "Goldman employees discussed the ups and downs of securities that were underwritten and sold by Goldman and tied to mortgages issued by Washington Mutual Bank's sub-prime lender, Long Beach Mortgage Company. Reporting the 'wipe-out' of one Long Beach security and the 'imminent' collapse of another as 'bad news' that would cost the firm $2.5m, a Goldman Sachs employee then reported the 'good news' – that the failure would bring the firm $5m from a bet it had placed against the very securities it had assembled and sold."

Goldman is fighting to clear its name after the $1bn fraud charges brought by the US Securities and Exchange Commission last week, and wants the case settled in court.

The movie, "The Big Short" dramatized this rather well.

Well, guess what it looks like Deustche has been doing...

DB gold exposure expressed as VaRDeustche has been a net seller of foreign exchange risk, which includes (wait for it now, and guess....) gold! They probably were not cash sellers, but purchased swaps to reduce exposure, possibly along the parameters I mentioned above with the guaranteed, zero premium call option.

If you enjoy this free analysis, there's much more where this came from as we pick apart many other banks in our paid research and knowledge modules. WE just finished a true forensic valuation (very extensive, and detailed analysis) of a very large European bank that led to a huge short recommendation. Subscribe here and pass the word. Our bank analyses have performed very well in 2016, with Banco Popular and Banco Popular Milano doing roughly 40% to 80% in theoretical returns (contingent on how the positions were taken). We have done an excellent job historically as well, calling the fall of Bear Stearns, Lehman, Countrywide, GGP, etc. If you think the free stuff is intense, you should see the stuff that we sell!

Furthering the discussion of potential fraud at Deutsche Bank subsidiary Xetra-Gold, I enlisted the opinion of a legal professional versed in such matters. Please read on after reveiwing the previous two posts on this topic which provide the necessary background:

  1. Veritaseum Knowledge Exposes Frightening Counterparty Risk At Deutsche Bank for "Gold Investors"
  2. Is Deutsche Bank Prepping for Fraud Charges Against It's Gold Derivative Products?

Here is an email exchange I've been having with a lawyer familiar with said matters.... 

".... There’s no fraud here.

At a minimum, fraud--including claims made under the UK Fraud Act of 2006--requires an affirmative misrepresentation or the concealment of a material fact. Neither is present here.

The “harm” of DB’s failure to deliver physical gold is fully and repeatedly disclosed as a risk in the Xetra investment prospectus. In fact, the prospectus makes it explicitly clear—at least twice—that Xetra investors have the legal status of unsecured creditors (much like a bank’s depositors). It likewise states that Xetra “Notes are not backed by assets” at all.

DB covered itself pretty well with the prospectus. I doubt that investors complaining of no delivery would even prevail on a claim for breach of contract, much less fraud.

I excerpted and highlighted key pages from the prospectus showing disclosures of the many investment risks that appear in the first ~25 pp. of the prospectus. Hell, they even tell investors that their access to gold might be blocked by terrorists.

As for the statement--"an investor is, from an economic point of view, invested in gold"--it's at worst puffery, which courts never put any stock in. Whatever that statement means, it can't mean--based on the many legal disclosures from the prospectus--that investors will be treated as secured creditors who entrusted physical gold to DB as a bailee."

My reply:

That's interesting. The marketing material states "an investor is, from an economic point of view, invested in gold" and that, from a factual perspective is in direct contravention to the statements in the prospectus... See below. I understand the point you have made, but if there is admittedly no correlation to the gold price, no ownership of gold, and no promise to be able to redeem for gold, there is no reasonably plausible or justifiable grounds to asset that someone is economically invested in gold. The delta between the marketing claims and the prospectus legal mumbo jumbo appears (to this layperson) to qualify for "an affirmative misrepresentation or the concealment of a material fact.". Can you walk me through how I am wrong?

... The phrase "from an economic point of view" is the kind of hopelessly vague qualifying language that lawyers added to inject uncertainty about what the sentence means.

But even if that language weren't there, and the statement just said, "you're invested in gold," a claim for fraud still wouldn't work, imo. Why not? Because the disclosures in the prospectus expressly say that the investment is unsecured, isn't backed by gold, etc. DB, in other words, is disclosing in writing the exact risks that investors are now complaining of.

By the same token, any contradiction between marketing materials and the investment prospectus is going to be resolved in favor of the latter. The prospectus is the controlling document, and in this case it is replete with disclosures that the investment is in no way tantamount to possession of physical gold. That fact is a killer for any fraud claim hinged on publicly available materials like a prospectus and marketing materials.

Looked at another way, DB covered its bases by saying that both (X) and (negation of X) are true. A court looking at that will say, nothing about that is misleading; confusing, perhaps, but not deceitful, and deceit is the essence of fraud.

There's one more disclosure that I didn't flag in the excerpt I sent last time (b/c I hadn't gotten to it yet). It's from the top of page 27 and made me almost fall out of my chair when I read it: "Deutsche Bank AG is not, in any way, obliged to protect the interests of the investors."

DB's candor is just astonishing. So is the credulity of anyone investing with them.

My reply: 

I see. My proclivity to deal in facts materially hampers my lawyering abilities. Now, let me put my argumentative hat on. If marketing materials are negatively contradicted by the prospectus then the marketing materials are fraudulent and misrepresentative, no?

I'm with you on the point of DB disclosing in writing the exact risks that investors are now complaining of. That is only the case because the investors are complaining about the wrong thing. 
No matter how many disclaimers the prospectus puts in, if it blatantly contradicts the marketing material then the marketing material is misleading at best (I'm sure that's against some law) and fraudulent from a layman's perspective (which I fully admit means nothing). The bar for fraud in the UK is affirmative misrepresentation, and that is exactly what the marketing material is. Now, I also understand the qualifier "economic", but there is no plausible way to spin that as an investment while simultaneously stating that there is no price correlation, no underlying rights and no underlying ownership. Those are the three pillar of an "economic" investment if there is such a thing.
I'm simply thinking out loud, but I really do feel if I were put on the stand as an expert witness to debunk the economic investment statement, facts will fly through flesh.

... i just found some US law that seems to corroborate your assertions re: marketing materials, but on 2nd glance, the economic investment statement was mentioned in the prospectus as well, which seems to nullify the protections that would have been provided in the US if the customers were qualified investors (which I don't believe they were) (and whose protections are downright silly). If UK law is similar, I guess it boils down to the supposed ambiguity of the terms (although as an investor, I don't find them to be ambiguous at all, they're just plain wrong!).

In closing from the lawyer:

"If marketing materials are negatively contradicted by the prospectus then the marketing materials are fraudulent and misrepresentative, no?

Misrepresentative, yes (accepting your definition of economic), and the marketing materials probably do in fact flout any number of laws against false advertising.
 
But fraudulent, no. The essence of fraud is to falsely induce someone by words or acts into doing something against his interests that he wouldn't have done but for the dishonesty. Courts consider the totality of the circumstances. So while you would undoubtedly tear the economic investment statement to shreds, you'd still be left with the many other statements from the prospectus that are true, and herein lies the problem.
 
The UK Fraud Act of 2006 is a criminal statute. So each element of the crime has to be proved beyond a reasonable doubt (or whatever the English equivalent burden of proof is). The first element of fraud by false representation under the Act is "dishonestly makes a false representation." The problem posed by the prospectus is that it would preclude a finding that DB acted dishonestly beyond a reasonable doubt. I mean, you've got one false (but arguably vague) statement vs. several clear-cut disclaimers that are accurate. The totality of the statements are perhaps half false and half true, but dishonest beyond a reasonable doubt? Fuhgetaboutit. DB played the game with all of its cards face up. Yeah, they contradicted each other, but they were damn sure visible to investors, who can claim they were misled only in a subjective (personal) sense, not in an objective way (which is how a judge would look at it).
 
Now, if--in addition to the mktg mat's and the prospectus--you've got some Goldman-like behavior where DB took out massive insurance policies on the investments it sold and concealed them from the buyer, it's a totally different story."

contradictory statements in Xetra-gold prospectus

DB

 

derivatives regulation on misrepresenation

derivatives regulation on misrepresenation2

We have forensically picked apart Deutsche Bank in a way that no other entity ever has, likely including Deutsche Bank itself. While we may not know all of its secrets, we likely now know more than almost everybody else. We will publish our findings to Veritaseum Knowledge clients early this week, but in the meantime we will put little teasers out to the public for the sake of conversation. "Why?", you may ask. Well, everybody already knows that Deutsche Bank is a basket case, but we are showing our clients that the real short opportunities and true systemic risks lie within DB's counterparties, whom have identified and are in the process of putting share price targets on. The first forensic report on the most proximal counterparty with an elevated share price is done, and the first counterparty share price target will be published to European Bank Contagion Assessment, Forensic Analysis & Valuation subscribers within 48 hours. There are several more to follow. In the meantime and in between time, let's discuss Deutsche in detail that you will find nowhere else on the web or on Wall Street.

Last week we illustrated what appears to be a slam dunk finding of Deutsche Bank fraud under the UK Fraud Act of 2006, reference "Veritaseum Knowledge Exposes Frightening Counterparty Risk At Deutsche Bank for "Gold Investors"". In said piece, we tracked down DB's alleged failure to deliver physical gold upon demand redemption of one of it's subsidiary's gold derivative instruments and superimposed it against DB's counterparty risk and blatant contradictions between it's marketing material (ie. website) and it's prospectus (which itself actually had material and confusing contradictions) - as excerpted:

  • ..."an investor is, from an economic point of view, invested in gold", but
    • "No correlation with the gold price", and 
    • and "The value of the Notes is a function of demand and supply regarding the Notes as such and not of the demand for and supply of gold", but
    • "For potential purchasers of the Notes the pricing may, apart from the gold price, also be determined by other factors (e.g., the creditworthiness of the Issuer, the evaluation of these risk factors or the liquidity of the Notes)." - keeping in mind that Deutsche Bank believes 
    • There's no movement in counterparty risks yearly, or cumulatively, due to collateralization (where said collateral is wide open to market forces and valuations) for instruments.
    • No control of genuineness or fineness of the physical Gold Neither the Issuer nor the Depositary Agent or any other agent of the Issuer will control the genuineness or fineness of the physical Gold held in custody on behalf of the Issuer by Clearstream Banking AG in its capacity as Depositary Agent.

Oh, there's more, for those of you who believed that line "an investor is, from an economic point of view, invested in gold". 

The purchasers of the Notes will only acquire the rights securitised by the Notes. The purchasers of the Notes will not acquire any title to, or security interests or beneficial ownership in, the physical Gold held in custody on behalf of the Issuer. An investment in the Notes does not constitute a purchase or other acquisition of Gold.

This comment excerpts the requirements of the UK Fraud Act of 2006, since the DB derivative issue was sold to UK investors. It clearly shows the material uncovered in our article can garner the label of fraud in the UK. There''s actually much more in the article if you click the aforereferenced link, but I believe many can get the message. So, where does this leave us? Well, it appears as if DB is prepping for a rash of fraud and litigation exposure. Looking at numbers buried deep within DB's more than 650 pages of financial reporting (just for the 2015 annual report), we find their disclosure of operational risk.

DB Operational risk 2015

'Profit and loss based operational losses increased by € 3.3 billion or 133 % compared to year-end 2014. The increase was predominantly driven by the event types “Clients, Products and Business Practices” and “Internal Fraud”, due to settlements reached and increased litigation reserves for unsettled cases. The increase in the event type “External Fraud” is caused by a provision for equity trading fraud.

As we drill down even further, we see even more damning information. From a frequency perspective. external fraud is the king. It happened more than any other type of operational loss, and for the year 2015, has almost matched the frequency of the previous 5 years combined. What is going on in a bank to cause such a dramatic uptick in fraud? 

To make matters worse, the clients, products and business practices losses (basically fraud, from our perspective) has almost doubled that of the previous 5 years - and that's just for the fiscal year 2015! The saga continues, and gets even darker. When looking at the distribution of actual losses, "Clients, Products & Business Practices" not only takes the lions share of the pie, but 2015 alone has matched the previous 5 years combined. What the hell is going on in this bank? More importantly, why is it getting so much worse?

DB Operational losses by event type 2015

 

This is how DB framed it:

"The above left pie chart “Frequency of Operational Losses” summarizes operational risk events which occurred in 2015 compared to the five-year period 2010-2014 in brackets based on the period in which a loss was first recognized for that event. For example, for a loss event that was first recognized in 2002 with an additional profit/loss event recognized in 2015, the frequency chart would not include the loss event, but the loss distribution chart would include the profit/loss recognized in the respective period. Frequencies are driven by the event type “External Fraud” with a frequency of 44 % of all observed loss events. The event types “Clients, Product and Business Practices” contribute 42 % of the events and “Execution, Delivery and Process Management” contribute 11 %. Others are stable at 2 %. The event type “Internal Fraud” has a low frequency, resulting in less than 1 % of the loss events in the period 2015. This is unchanged compared to 2010-2014. The above right pie chart “Distribution of Operational Losses” summarizes operational risk loss postings recognized in the profit/loss in 2015 compared to the five-year period 2010-2014. The event type “Clients, Product and Business Practices” dominates the operational loss distribution with a share of 63 % and is determined by outflows related to litigation, investigations and enforcement actions. “Internal Fraud” has the second highest share (23 %) which is related to regulatory events we have experienced in recent years. Finally, the event types “External Fraud” (8 %) and “Execution, Delivery and Process Management” (5 %) can be considered minor, compared to other event types."

What DB failed to point out was that although "Internal Fraud" consisted of just 1% of the occurrences, it represented 23% of the loss amount of 2015, which is ~10% more than the previous 5 years combined, which was in itself still significantly more expensive than all of the other categories. 

This bank is a  mess. As for the source of all of these numbers, let's display it in words so all can get a different perspective...

Legal Actions by the Counterparties since 2014 (that's right, this is just since 2014):

There are some incidents where Deutsche bank is defendant in various lawsuits by purchasers and counterparties who were involved in transactions relating to RMBS and their affiliates. Some of the counterparties who faced damages are:

  • Azora Bank Ltd :

Damage of US$61 million attributable to Deutsche bank

  • The Federal Deposit Insurance Corporation:

They filed a lawsuit against Deutsche bank as receiver of

  • Colonial bank whose damage amount is around US$189 million

  • Franklin Bank S.S.B and Guaranty Bank; where the damage amount is almost US$901 million

  • Citizens National Bank and Strategic Capital Bank; aggregate loss is around US$66 million

  • The federal Home loan bank of San Francisco

  • Phoenix light SF Limited

  • Royal Park Investments

  • Residential Funding Company

  • Mass Mutual Life insurance company

  • The federal Home loan bank of Boston and The federal Home loan bank of Des Moines

  • RBMS Recovery Holdings 4, LLC

  • VP structured Products, LLC

  • Texas County & District Retirement system for 4 RMBS bonds underwritten by Deutsche Bank

  • Charles Schwab Corporation for purchasing countrywide- issued RMBS certificate

  • Trustee civil Litigation investors

  • Royal park Investments

  • The national credit Union Administration Board (NCUA) for investing in 121 RMBS trusts

  • Western and Southern life Insurance company and five related entities( collectively known as Western and Southern) for 18 RMBS trusts

  • Commerzbank AG for investments in 50 RMBS trusts

  • IKB (IKB International, S.A in Liquidation and IKB Deutsche Industriebank A.G.) for their collective investments in 37 RMBS trusts

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 Let me ask you a question. If you were a prospective gold investor, and were not a client of Veritaseum Knowledge, would you buy these gold instruments?Deuscthe Borse Commodities prospectus

Well, clients of Deustche Bank et. al. certainly did. Reference this story from RT.com: Deutsche Bank refuses clients' demand for physical gold

Clients of Germany’s biggest bank who have invested in the exchange-traded commodity Xetra-Gold are facing problems when they want to obtain physical gold, according to German analytic website Godmode-Trader.de.
Xetra-Gold is a bond on the Deutsche Börse commodities market, and Deutsche Bank is a designated sponsor. On the website, Xetra-Gold says its clients have the right for physical delivery of gold...
“Physically backed: The issuer uses the proceeds from the issue of Xetra-Gold to purchase gold. The physical gold is held in custody for the issuer in the Frankfurt vaults of Clearstream Banking AG, a wholly-owned subsidiary of Deutsche Börse. In order to facilitate the delivery of physical gold, the issuer holds a further limited amount of gold on an unallocated weight account with Umicore AG & Co.,” says Xetra-Gold.
However, despite claims that every virtual gram of gold is backed by the same amount of physical gold, clients have been refused the precious metal upon demand.
According to Godmode Trader, its reader “sought physical delivery of his holdings of Xetra-Gold. For this he approached, as instructed by the German Börse document, his principal bank, Deutsche Bank." However, he was told that “the service” was no longer available for "reasons of business policy". The article went on to say it’s not yet clear whether other banks are still delivering gold through Xetra.

The website's marketing material is clear enough...

DB Xetra Gold

The issuer of Xetra Gold is an entity jointly owned by Germany's Commerzbank & Deutsche Bank (rumored to be merging - Yechh!), among others. Uh Oh!

Deuscthe Borse Commodities

In the Deutsche Borse Xetra Prospectus under the heading "Key information on the key risks that are specific to the Notes", you will find the following snippet:

Upon acquisition of Notes, an investor is, from an economic point of view, invested in gold and thus bears the market risk associated therewith.

This statement is simply not true, and it's amazing that it passed muster with legal counsel and auditors. Why? Because the following line in the prospectus literally says:

"No correlation with the gold price"

Let's look at this a bit more closely, shall we...

The value of the Notes is a function of demand and supply regarding the Notes as such and not of the demand for and supply of gold. For potential purchasers of the Notes the pricing may, apart from the gold price, also be determined by other factors (e.g., the creditworthiness of the Issuer, the evaluation of these risk factors or the liquidity of the Notes).

Hmmm... It sounds as if the gold is actually held on the balance sheet of the note issuers. If that's true, then this is not an investment in gold, it's and investment of a derivative of gold exposure and the balance sheet exposure of the issuer. Now, how many of the so-called "investors" of these derivatives got that concept BEFORE they bought in???

Deuscthe Borse Commodities prospectus - counterparty risks

Now, you guys (and girls) tell me, do we have reason to suspect credit and solvency issues at the Issuer,'s parent, Deutsche Bank? Let's refer to notes available to subscribers of Veritaseum Knowledge, in particular, the European Bank Contagion Assessment, Forensic Analysis & Valuation module... 

DB Cojunterpary risk shift 2

Actually, DB doesn't think we should concern ourselves with things such as adjustements for credit risks or credit worthiness...

Deusstche loan valuation 2

So, with the aforementioned understanding, let's move on through the prospectus...

"The value of a Note will therefore not necessarily equal exactly the value of one gram of Gold at any given time."

"No rights or beneficial ownership in the Gold"

So, let's add these up now...

  • ..."an investor is, from an economic point of view, invested in gold", but
    • "No correlation with the gold price", and 
    • and "The value of the Notes is a function of demand and supply regarding the Notes as such and not of the demand for and supply of gold", but
    • "For potential purchasers of the Notes the pricing may, apart from the gold price, also be determined by other factors (e.g., the creditworthiness of the Issuer, the evaluation of these risk factors or the liquidity of the Notes)." - keeping in mind that Deutsche Bank believes 
    • There's no movement in counterparty risks yearly, or cumulatively, due to collateralization (where said collateral is wide open to market forces and valuations) for instruments.

Oh yeah! If I were hired as an expert witness, this stuff could get ugly.... As for now, methinks its time to go put shopping again.

Oh, there's more, for those of you who believed that line "an investor is, from an economic point of view, invested in gold". 

The purchasers of the Notes will only acquire the rights securitised by the Notes. The purchasers of the Notes will not acquire any title to, or security interests or beneficial ownership in, the physical Gold held in custody on behalf of the Issuer. An investment in the Notes does not constitute a purchase or other acquisition of Gold.

Here's some more risks, this time due to liquidity of the derivatives....

Tradeability No assurance can be given that the admission of the Notes to the regulated market (General Standard) of the Frankfurt Stock Exchange will continue or that the Notes will continuously be traded on the Frankfurt Stock Exchange. Consequently, there is the risk that sale of the Notes on an exchange may not, or not at all times, be possible.

In reference to actually getting what you're paying not to own...

No control of genuineness or fineness of the physical Gold Neither the Issuer nor the Depositary Agent or any other agent of the Issuer will control the genuineness or fineness of the physical Gold held in custody on behalf of the Issuer by Clearstream Banking AG in its capacity as Depositary Agent. As the party responsible for all physical delivery processes, Umicore AG & Co. KG will be liable for the genuineness and fineness of the physical Gold acquired by the Issuer with the proceeds from the issue. If the physical Gold which is held in custody by Clearstream Banking AG as Depositary Agent of the Issuer is not genuine or if its fineness does not comply with the requirements specified in the rules adopted by The London Bullion Market Association (or a successor organisation representing market participants in the London gold trading market) for the delivery of gold bars, as amended from time to time and which, at the date of this Prospectus, provide for a minimum fineness of 995 parts per 1000 pure gold, the Notes might only be covered by the aforementioned liability claims against Umicore AG & Co. KG as the party responsible for all physical delivery processes. Market disruptions If the Calculation Agent determines that a market disruption has occurred or continues to exist at any given time, the Issuer will not fulfil its delivery or payment obligations until the Calculation Agent determines that the relevant market disruption has ceased to exist. Any such determination may delay 16 fulfilment by the Issuer of its delivery or payment obligations

Become a member of Veritaseum Knowledge now, and subscribe to the knowledge module European Bank Contagion Assessment, Forensic Analysis & Valuation. There's much, much, much more to this story than meets the eye. More apparently, there are many more European banks and institutions involved - in countries you'd likely never suspect. We suspect some of them will be going pop in the not too distant future. This is from the team that called Bear Stearns, Lehman, GGP and nearly all of the significant financial institution failures of the 2008 crash.

 

 

Our report on Banco Popular Milano was released to clients in March and April of 2016 as part of the "Potential for a European Banking Collapse" series. This research is continuously being updated at Veritaseum Knowledge, including additional and other financial institutions along the way. Here is an excerpt from the report:

BPM report teaser

This is the Banco Popular Milano share price over the time period in question...

Banco Popular Research stock price

'Nuff said! Click here to participate in Veritaseum Knowledge. We've compiled a list of six banks whom we believe the market has materially underestimated the risk of. Some of which are systemically relevant institutions with plenty of room to fall in terms of public equity pricing.

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