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Inquiry launched into $40 million fraud

The United States investment bank, Merrill Lynch, has opened an investigation into a $40 million fraud involving a Swiss bank, according to the Financial Times newspaper. The case reportedly involves a UBS branch in Geneva.

This content was published on January 7, 2000 - 16:44

The United States investment bank, Merrill Lynch, has opened an investigation into a $40 million fraud involving a Swiss bank, according to the Financial Times newspaper. The case reportedly involves a UBS branch in Geneva.

The money reportedly belonged to one of the company's largest clients, the Egypt-based Arab International Bank, AIB, according to the paper.

The transfer of funds to Geneva between 1996 and 1998 is reported to have been ordered by an AIB employee with the approval of one or more members of Merrill Lynch, said the Financial Times. A former member of the company in Egypt has since been arrested.

Five of the six fund transfers carried the authorising signature of a Merrill Lynch employee who died three months before the first transaction was carried out, according to Reuters news agency. The signature on the sixth transfer was that of an employee with insufficient authority.

Merrill Lynch is said to be pursuing civil and criminal cases to recover the securities. It is also seeking to freeze the UBS account in Geneva.

AIB said it had been repaid for the losses it had incurred. It said it was pleased with Merrill Lynch's response to the incident.

From staff and wire reports

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