Commodity trade finance fraud bleeding banks

London

FOR all the high-tech wizardry of modern financial markets, there's one corner of the commodity world that still depends almost entirely on printed paper - making it an easy target for crooks.

Buyers and sellers of base metals like copper, aluminium and nickel use documents known as warehouse receipts to prove every pound involved in a transaction actually exists and who owns it. The receipts, from a long list of issuers who often stamp them with holograms and secret codes, have become the linchpin of bank loans backed by the metal as collateral.