Risk Areas And Their Security Solutions

3 At-Risk Areas And Their Security Solutions

As the internet becomes more important in our day-to-day lives, the threats associated with it become more various and sinister. Cybersecurity has never been as important as it is now. This was the takeaway message from a speech by US admiral James Syring to a Senate subcommittee on digital security and while his concerns lay more in the area of hacks on missile programs by belligerent foreign governments, digital security is something that needs to be taken very seriously in the civilian world as well. Here are three areas where the need is most pressing.

Q1 Security Venture Funding At A Glance

> Across Q1, security firms raised USD753.5m in venture funding.

> This figure was spread across 55 deals.

> Largest deal went to Chinese mobile security Mobi Magic, which raised USD100m in February.

Selfie pay

1. Online Payments And Commerce

There are now very few people in the industrialised world who haven’t had some experience of e-commerce, but online fraud is a real and present threat, and for all the advances made, solutions need to keep innovating to meet threats. One of the largest rounds of Q1 for a security firm went to Tel Aviv-based Riskified, which provides end-to-end fraud detection tools. Riskified’s algorithms are designed to detect potential fraudulent activity and provide countermeasures where necessary. Behavioural analytics tools, which analyse customer in-site activity and search for suspicious or non-human behaviour, are only likely to get more important as the power of commercial artificial intelligence develops. London-based Cybertonica, which uses online biometrics, machine learning and data (such as how a user moves physically around a web page) is another firm working in the space to watch.

Offloading some of the security burden to the user side of things could also be helpful. Even here, the future is unclear. Passwords are an annoying solution to a pressing problem, but even they may be in danger of redundancy in the not too distant future. Computers capable of brute force code-breaking are getting cheaper, and finding their way more easily into nefarious hands. Better solutions are needed. Biometrics is the most promising avenue, with face-recognition payment authentication – otherwise known as selfie payments – attracting particular buzz. Chinese e-commerce giant Alibaba led the way here and Amazon and Mastercard are trialling similar solutions. There are now even third-party firms offering plugin selfie authentication solutions, although the technology will probably need to engender a greater degree of public familiarity before such firms can monetise effectively.


2. Devices And IoT Security

While the prospect of smart homes and eventually smart cities may give the impression of the height of digital utopia, without robust security solutions, a world of networked, smart devices could quickly fall apart, or even become dangerous to its users. Consider for example the prospect of hacked webcams or baby monitors, giving strangers access to the most intimate aspects of people’s lives. Of particular interest in stopping this nightmare scenario unfolding is California’s Forescout, which picked up USD76m in a unicorn-making Series G funding in January. Forescout, instead of providing endpoint security, gives clients a transparent overview of all the devices in a connected system, and allows them to manage security threats as and when they emerge.

The danger gets even more menacing when the devices are scaled up. Connected cars have numerous benefits and in many ways could be the future of driving, but they also pose potentially disastrous risks if hacked. If that sounds alarmist, think again – last year, under controlled conditions, hackers managed to switch off the engine of a connected Jeep whilst it was travelling on a highway. More than 1.5m vehicles were recalled as a result. However, solutions are emerging. Harman, for instance, which supplies in-car entertainment platforms to the likes of BMW and Porsche is working on a five-layered security solution which protects the car from the hardware to the whole-vehicle level, and which includes military grade anti-hacking technology. The connected car market will be worth nearly USD50bn by 2020, according to Markets And Markets, so it is the interests of everyone that these solutions get into place.


3. Corporate Data

Corporate data presents an extremely valuable trove for hackers and as continued leaks, be it Sony Pictures, Ashley Madison and Mossack Fonseca, have continually shown, no system is immune from attacks. Corporations need to be incredibly vigilant against cybercrime, or the losses will be catastrophic. Happily, this is where much of the security sector is focused, and you don’t need to look far to see innovative firms pulling in significant sums of funding to protect corporate data.

However, in general, corporate security teams face less a problem with a lack of technological solutions on the market, as they do with corporate complacence. Mossack Fonseca’s calamitous data leak was in part due to the fact that many of its files were stored on out-of-date versions of WordPress, which was known to have a number of well-known security vulnerabilities. Many of the other security precautions were out-of-date or faulty. The Mossack Fonseca leak, for all its other global implications, is a potent reminder that technology can only go so far – there needs to be an astute human on the other end.

2016 Efma Distribution Summit

Global banks join Efma, Microsoft and Avanade to recognise innovation and award fintech solution providers at the 2016 Efma Distribution Summit
Major fintech initiative also receives endorsement from BNP Paribas, Group BPCE, Deutsche Bank, Intesa Sanpaolo, ImaginBank and Santander.

Paris, Thursday 14 April 2016

Today at the 2016 Efma Distribution Summit in London, Efma, Avanade and Microsoft have launched a new Fintech Portal (www.efma.com/fintech) endorsed by BNP Paribas, Group BPCE, Deutsche Bank, Intesa Sanpaolo, ImaginBank and Santander. This portal connects fintech organisations with retail banks and insurance companies, enabling them to showcase best-in-class solutions to financial institutions around the world.

The awards were judged by a selection committee comprising 48 highly regarded banking and insurance executives from some of the world’s largest financial organisations. The committee received 204 entries and selected four of the best fintech solutions within the following categories: Business Banking; Distribution and Marketing; Insurance; and PFM-Payment. In addition, they also recognised two technology solutions for the best overall fintech solution. Winners were awarded at today’s Awards Ceremony at the Grand Tower hotel.

This year’s Efma Fintech winners included:

         Best Business Banking Solution: Maestrano with Maestrano Enterprise, Australia

Maestrano Enterprise is a business platform that helps SMEs run their business better in the cloud, while improving the banking experience.

         Best Distribution and Marketing Solution: Essentia Analytics with Essentia Insights, UK

Essentia makes software that helps humans make better investment decisions.

         Best Insurance Solution: Minalea with Smart Assistant for Insurance Vendor, France

Smart Assistant for Insurance Vendor helps insurers improve their commercial performance and customer relationship quality by focusing on innovation, technology, data and deep insurance knowledge.

         Best PFM-Payment Solution: North Side with VerbalAccess, Canada

VerbalAccess enables plain-English access to financial services and large document databases through mobile and web channels, cutting costs for financial institutions and making it easier for consumers to use financial services and discover new products and services.

         Special Jury Award: PayKey, Israel

PayKey’s goal is to bridge the gap between social and banking. PayKey is the simplest and fastest mobile-centric way of making personal and commercial payments.

         Efma Special Award: SaleMove with SaleMove Engagement Platform, US

SaleMove’s vision is to meet or exceed the in-person customer experience online.

“This year’s Fintech Awards reflect the innovation that is providing retail banks and insurance companies with the opportunity to drive down customer costs and create more engaging customer and employee experiences,” said Violetta Senda, Avanade Europe’s senior director for Digital Strategy and Digital Banking. “Today’s awards celebrate the vision and imagination that is required to make technology innovation possible. Working with Efma and Microsoft to help bridge the gap for these two communities and nurture stronger connections between the fintech community, retail banks and insurance companies has been very exciting and wonderful to celebrate today.”

“The financial technology sector is booming, and Microsoft is proud to be working with Efma and Avanade on this initiative to connect the rapidly expanding fintech community with Efma members globally,” said Patrice Amann, EMEA financial services director at Microsoft.

“We believe this platform and community will provide a foundation for Efma members to identify, network, and collaborate with fintech solution partners to support them in driving their innovation agenda.”

“The impact of fintech can be felt across the entire retail financial services industry and, if handled correctly, presents a huge opportunity to banks the world over,” said Vincent Bastid, Efma’s CEO. “It’s for this reason that we are joining forces with highly regarded organisations from across the sector to present the Fintech Portal and associated awards. By recognising the best players in fintech, and helping them join forces with banks, we are aiding much-needed collaborations that will help to create a better future for everyone.”

Efma is now accepting 2017 applications, so fintechs are encouraged to keep submitting (www.efma.com/submityourfintech) their applications to the portal.

Advertisers Don’t Need To Fear Ad Blockers

Advertisers Don’t Need To Fear Ad Blockers

Looks like all those fears about advertising being devastated by ad blockers are overblown, with UK digital ad spending growing at its fastest rate for seven years. Some 78% of this growth is due to increasing spending on mobile, which now makes up 30.5% of digital advertising. This increase shows just how small the impact of ad blocking is on the advertising industry despite scary figures from studies like PageFair that claim it’s costing advertising USD21.8bn a year.

Advertising At A Glance

> Digital ad spending in the UK increase 16.4% from 2014 to 2015 reaching GBP8.6bn (USD12.2bn).

> 78% of growth due to increase in spending on mobile.

> Spending on video is up 50.7%.

> Spending on native and content grew 49.9%.

> Social media spending up 45%.

ad block 700

Ad Blocking Limits

So why is spending on mobile still soaring despite the well-publicised launch of mobile ad blockers? Part of this is down to the limitations of mobile ad blockers as most only block ads in mobile browsers. This leaves ads within apps untouched. That’s good news for advertisers as its in-app ads that are better for advertisers. These ads are typically better optimised for the user, while too many mobile browser ads are still poorly formatted enough that they damage the user experience.  Apps within ads are also likely to be more targeted as the user is logged into that app. This is particularly true of social networks such as Facebook where the advertisers can target ads using all the precise demographic data that the network collects on its users. It’s for these reason social networks are the one place brands can’t neglect when advertising.

facebook video mark zukerberg 700


Part of the appeal of ad blocking is that people find the ways in which brands can follow them online understandably creepy. A casual search for a TV means users may then see ads for TVs for months afterwards. The IAB/PwC shows many of these reports are overblown, with more than half of 18 to 24 year olds willing to share personal details to get a cheaper or free product. It shows even among young people, who are the most likely to use ad blocking, most are still quite prepared to hand over their personal information to brands. It goes to show just how important it is for brands to make sure to offer deals in exchange for the person handing over personal information. This also helps brands reduce their reliance on others, such as Google and Facebook.

apple TV long

New Devices And Methods

There’s also connected TVs which over the long run offer great opportunities for advertisers to finally bring targeting to the massive market of television advertising. Although fully integrating this with TV coverage is some way off, the shift to automated target ads in TV would be in line with the rest of advertising.

“There’s a shift in sales from networks to real-time-bidding exchanges, a shift from direct to programmatic direct, and one from open to private marketplaces,” says Dan Bunyan of PwC. “We predict programmatic will account for 80-90% of display ad sales by 2019.”

Adoption of connected TVs is increasingly rapid with growth up 21% in a year. That’s higher than smartphones and tablets, at 18% and 16% respectively. Manufacturers also exert tight control over connected TVs meaning it’s unlikely they would permit ad blockers to run on these devices.

Facebook builds its dream virtual reality video camera

Facebook builds its dream virtual reality video camera, and gives the design away for free

The Surround 360's cameras are fixed to an aluminum chassis with the outer housing crafted from ...

The Surround 360’s cameras are fixed to an aluminum chassis with the outer housing crafted from powder-coated steel. View gallery (6 images)

One observant media executive noted that Uber, the world’s largest taxi company, owns no cars, AirBnb, the largest accomodation provider, owns no real estate and Facebook, the most popular media owner, creates no content. The social media giant looks unlikely to change course as it forges ahead with its grand vision for virtual reality, but it does want to have a hand in the tools that bring it to us. Announced today, Facebook’s Surround 360 is a 17-lens 3D-360-degree video capture system that looks like a spaceship and produces VR content on the fly, but its most impressive feature? The design and software will be entirely open-source.

That Facebook is betting big on immersive video and VR isn’t exactly a secret. Users of the platform may have spotted 360-degree clips already appearing on their News Feeds, and perhaps even strapped on a VR headset to have a look around for themselves. So when you consider its US$2 billion acquisition of Oculus, Facebook is clearly working toward a future where our social networking is facilitated through augmented and virtual realities.

From the platforms that deliver the experience to the hardware that creates it, Facebook is looking to shape the emergence of immersive video from one end to the other. The Surround 360 system is kind of like Tesla’s Roadster, an outrageously expensive pony aimed at piquing the interest of an influential few and then inspiring a wave of commoners to follow suit.

That Facebook is betting big on immersive video and virtual reality isn’t exactly a secret. Mark Zuckerberg takes to the stage at Mobile World Congress in Spain earlier this year

Fourteen cameras face outwards in a neatly arranged circular array, with one fish eye camera pointing upwards and two down below. The 17 camera sensors shoot at 30 and 60 frames per second and work with a global shutter, meaning that every pixel is captured at the same moment. This synchronization makes it easier for the footage to be smoothly stitched together.

This process is also handled aboard the Surround 360 through Facebook’s computational imaging algorithm, which it claims builds on existing optical flow algorithms but is more mathematically complex and provides superior results. The resulting video is output at 4K, 6K and 8K per eye, which can be viewed on VR headsets like Oculus Rift and Gear VR.

The Surround 360’s cameras are fixed to an aluminum chassis with the outer housing crafted from powder-coated steel. The company says that these materials provide enough stability to avoid pesky camera shake and protect the insides from damage.

It may be a relatively nascent type of tech, but 360-degree cameras are already starting to emerge at all kinds of price points. You have shooters like Kodak’s Pixpro SP360-4K and Ricoh’s Theta S, costing no more than $500. GoPro also has a consumer-friendly 360-degree camera array on the way called Omni, which we assume will be cheaper than its $15,000 Odyssey setup consisting of 16 GoPro Hero4 Blacks.

Like the Odyssey, and other high-grade spherical shooters like Nokia’s $60,000 Ozo, the Surround 360 was designed with professional VR content creators in mind. Facebook won’t be selling the device, nor does it seem to harbor ambitions to branch out into camera manufacturing, but the Surround 360 could prove significant in a way that doesn’t immediately impact the company’s bottom line.

By giving anyone and everyone access to a 3D-360-degree video camera design that it claims to be production-ready and state-of-the-art, Facebook is playing the long game. It hopes by making the design and stitching code open source on Github this US summer, imaginative minds will clamber over one another to build their own and start adding to the VR content pool. Provided of course they have $30,000 for the necessary parts to spare.

Amazon Kindle Oasis

Hands On: Amazon Kindle Oasis

The lighter and thinner Kindle Oasis has a dramatic new shape and comes with a leather charging cover.
Amazon Kindle Oasis

Amazon’s new Kindle Oasis is here (No, it has nothing to do with the band).

The Kindle Oasis costs $289.99, which makes it the priciest ebook reader currently on the market. But here’s why: It’s 30 percent thinner, over 20 percent lighter, comes with a leather charging cover that contains an extra battery, and has a dramatic new shape.

Amazon Kindle Oasis

I held the Oasis in my hands, read a few words, and felt its new feather-light design. Weighing an impressive 4.6 ounces and measuring just 3.4mm (0.13-inch) at its thinnest point, the Oasis is the lightest and slimmest Kindle so far. Instead of a uniform, flat surface like previous readers, the Oasis looks like a wedge, with a slightly raised bump at one end that shifts the Kindle’s center of gravity to your palm. It stayed balanced in my grip, like the spine of a book, making it perfect for one-handed reading. And it doesn’t matter if you’re lefty or a righty—a built-in accelerometer recognizes which hand you use to hold the reader, and automatically flips the screen to accommodate. Two small, vertical, built-in buttons located on the bezel handle page turns.

As for the screen, the Oasis uses a similar display as last year’s Kindle Paperwhite$119.99 at Amazon. It’s a 1,448-by-1,072-pixel, 300ppi E Ink Carta screen, with a 60 percent bump in brightness. A new diffractive pattern within the screen reduces glare and improves reading in different lighting scenarios. It was difficult to tell exactly how different the new screen is from previous Kindles, but text looked perfectly legible under indoor office lighting.

Font fiends will be happy to hear a new typeface called Ember comes with the Oasis. Like Bookerly, the font that debuted alongside last year’s Paperwhite, Ember could be released for other Kindle products and apps via a software update, but Amazon hasn’t confirmed whether or not that will happen.

Amazon Kindle Oasis

Besides the slimmer shape and the ergonomic grip, the biggest difference between the Oasis and past Kindles is its dual-battery design that incorporates a leather cover with a built-in lithium-ion cell. Once you magnetically connect the cover to the Oasis, it starts recharging automatically and adds up to nine weeks of battery life to the reader, according to Amazon. Without the cover, the Oasis will last about two weeks before it needs a charge. The cover itself, made of high-quality leather in black, merlot, or walnut, comes with every Oasis—one of the reasons the price is so high this time around. The other big reason is the special metal alloy Amazon used to make this the thinnest Kindle yet.

Amazon Kindle Oasis

Don’t worry, though. The Oasis and its near-$300 premium won’t change the pricing for the rest of the Kindle lineup. At $80, the basic Amazon Kindle$79.99 at Amazon is still the most affordable reader out there, with access to Amazon’s wide selection of ebooks. The Kindle Paperwhite, our favorite ebook reader, still goes for $120, and the Amazon Kindle Voyage$199.99 at Amazon, which seems kind of redundant now that the Paperwhite has the same display, costs $200. The $290 Oasis is simply a more expensive, luxurious addition to Amazon’s lineup.

Given its high-end trappings, I’m somewhat surprised that the Oasis isn’t waterproof like the Kobo Aura H2O$180.02 at Amazon or the Nook GlowLight Plus$129.49 at Amazon. It also doesn’t seem to make for a significantly different reading experience from the Paperwhite, based on the limited time I spent with it.

That said, the ebook market is slowing down, and the Oasis can be seen as an attempt to renew some of the interest that has faded over time. I just wonder if Amazon should have gone in the opposite direction, with an ultra-low-cost ebook reader rather than a top-of-the-line model. After all, its inexpensiveFire tablet$49.99 at Amazon seems to be selling just fine. We’ll have to wait to check out a review unit before we can really make a call.

Today’s CO2 may become tomorrow’s concrete

Today’s CO2 may become tomorrow’s concrete

J.R. DeShazo (left) and Gaurav Sant show off a sample of the new building material they ...

J.R. DeShazo (left) and Gaurav Sant show off a sample of the new building material they have created to replace conventional concrete (Credit: Roberto Gudino/UCLA).

As carbon emissions continue to rise and cause the planet to warm up, we need to find ways to reduce them. Capturing carbon at the source of its emission is one of the solutions, but there is still the problem of storing all the carbon sucked out of the atmosphere. If that captured carbon could be put to good use, then perhaps we could have the perfect capturing system in place. This is the line of thinking that researchers at University of California (UCLA) are currently pursuing, and they have some big plans for all that carbon: turning it into concrete.

The conversion of carbon into concrete would be a double whammy since concrete production itself is very planet-unfriendly and accounts for 5 percent of all carbon emissions. But an even larger source of CO2 emissions is flue gas, the combustion exhaust gas from power plants, the scientists’ main target.

The carbon would be captured and become the raw material for what they call Co2ncrete, using 3D printers in its fabrication. The researchers describe the multi-stage, complex process, which they are still developing, as upcycling.

They started with the idea that capturing CO2 emitted during the calcination of limestone is a feasible method to produce sustainable concrete. Then they set out to investigate how Ca(OH)2 (calcium hydroxide) carbonation would react when exposed to both liquid and supercritical CO2 (the point where distinct liquid and gas phases do not exist). They tested several parameters, including time, temperature and pressure.

For their experiments, the researchers used carbon dioxide with a purity of more than 99 percet. The carbon was extracted from a pressurized reservoir maintained at 20 MPa (megapascal) using a siphon, which was employed in all of the carbonation experiments.

At this stage the material has been produced at lab scale and 3D printed into tiny cones. “We have proof of concept that we can do this,” UCLA’s J.R. DeShazo says. “But we need to begin the process of increasing the volume of material and then think about how to pilot it commercially.”

The researchers would like to see its technology being used by coal-fired power plants in the US as well plants in China and India, which are also global leaders in emissions. They want to create a closed-loop process that prevents carbon from going into the atmosphere while at the same add a great amount of commercial value to the clean-up operation.

“We can demonstrate a process where we take lime and combine it with carbon dioxide to produce a cement-like material,” Gaurav Sant, science collaborator to the project, adds. “The big challenge we foresee with this is we’re not just trying to develop a building material. We’re trying to develop a process solution, an integrated technology which goes right from CO2 to a finished product.”

Once they further develop the technology, the researchers will be faced with the equally massive challenge of convincing industry leaders that the technology is good for the planet as well as their bottom line.

“This technology could change the economic incentives associated with these power plants in their operations and turn the smokestack flue gas into a resource countries can use, to build up their cities, extend their road systems,” says DeShazo.

The video below features the researchers talking about the science and economics involved in making Co2ncrete.

Source: UCLA

Credit Card Processing

Apply for Credit Card Processing today.

Accepting Credit Cards is Now for Anyone. On Any Device. Anywhere.

Cards, eChecks and Debit.

The Payment Industry is in need of a serious change.  For too long it has cost organizations far too much money and time to do something as simple as receiving money on their website or application.  It’s the Internet age, but for some reason organizations have to pay 2.9% of all of their revenue, wait weeks for bank approval, and hire a developer just to do what amounts to moving bits from one bank database to another.

The next generation payment & eCommerce checkout system that enables any organization to receive money on their Website, Social Network, or Web Application without transaction costs. We are a multi-payment gateway that accepts credit cards (Visa/MasterCard/Amex/Discover), eCheck (ACH/Dwolla), and eCash (Bitcoins) with 0% transaction fees. Thousands of merchants are using our their online payments, shopping cart, donation management, subscriptions, eCommerce integrations, recurring payments, checkout experience and more. Plus, unlike other payment networks, our checkout system is delightful to work with and built for the Internet age.payment processing

Multiple Payment Options

In person you can accept cash, credit, and check for your organization. But online you have been limited to just credit cards… and that gets expensive. But now, for the first time in history you can easily accept multiple online payment methods. And this has big implications for your bottom line and your customers’ payment flexibility. Because legacy checkout systems are 1 dimensional, organizations are cornered into absorbing unavoidable credit card fees.

Credit Cards: Enables you to accept all major credit cards including Visa, Master Card, American Express, Discover, and includes international payments.

eCheck: Allows you to add eCheck (check21 and Dwolla) to your checkout experience as a payment option. eCheck uses the banking network to transfer money directly between bank accounts, skipping out on the middle-man who scoops up big percentages.

eCash: Allows you to add Bitcoin to your checkout experience as a payment option. Bitcoin is the internet’s cash and is the first completely free 0% option to both accept and make payments with. Bitcoin is the first digital currency in line for our eCash payment option.

Are you a high risk business in the United States, Canada or banking in Europe, Asia, we can help?

eComTechnology is a registered ISO/MSP for BMO Harris Bank, N.A., Chicago, IL., and Wells Fargo Bank, N.A., Walnut Creek, CA.

robert@ecomtechnology.com Inquire about an application today. pageban

The Daily Mail is exploring a bid for Yahoo

The Daily Mail is exploring a bid for Yahoo

Marissa Mayer, President and CEO of Yahoo, participates in a panel discussion at the 2015 Fortune Global Forum in San Francisco, California November 3, 2015. REUTERS/Elijah Nouvelage Thomson ReutersMarissa Mayer, president and CEO of Yahoo, during a panel discussion at the 2015 Fortune Global Forum in San Francisco.

The Daily Mail and General Trust PLC, the parent company of the British tabloid the Daily Mail, is investigating a possible bid for Yahoo, according to a report by The Wall Street Journal.

The company is reportedly in talks with multiple private-equity companies about possibly backing the bid.

Yahoo set the deadline to place bids for its core business on next Monday, according to previous reports.

The Daily Mail’s bid could take two different routes, according to The Journal:

In one scenario, a private-equity partner would aim to acquire the entirety of Yahoo’s core web business, with the Mail taking over the news and media properties.

In the other scenario, the private-equity firm would acquire Yahoo’s core web business and merge its media and news properties with the Mail’s online operations. The merged units would form a new company that would be run by the Mail and give a larger equity stake to the Mail’s parent company than under the first scenario.

The Daily Mail is far from the only company in the running.

Verizon is expected to place a bid for Yahoo this week, while Google is also considering making an offer, according to a report by Bloomberg. The Bloomberg report said Verizon would be willing to make an offer for Yahoo’s core internet business and its stake in Yahoo Japan. Verizon values Yahoo’s core business at less than $8 billion, it said.

Aside from Google, the magazine publisher Time and the private-equity funds Bain and TPG remain interested in making a bid, according to the Bloomberg report.

The company is struggling after a three-year turnaround effort led by CEO Marissa Mayer failed to gain much traction. The company put its core internet business up for sale after pressure from activist investors to make “significant changes” to the company. According to a Re/code report, Yahoo is telling potential buyers it expects to see its revenue drop another 15% this year.

Will the Treasury Rally Turn to a Rout?

Will the Treasury Rally Turn to a Rout?


Posted: 07 Apr 2016 01:17 PM PDT

Wes Goodman of Bloomberg reports, Jamie Dimon Warns Treasury Rally May Turn to Rout as Rates Rise:

Jamie Dimon, chief executive officer of JPMorgan Chase & Co., said he’s concerned demand for Treasuries will decline and the Federal Reserve will raise interest rates faster than people expect.

The market won’t be able to rely on the biggest buyers of U.S. debt: the Fed, foreign nations and commercial banks, Dimon wrote in his annual letter to shareholders Wednesday. Increasing consumer and business confidence could boost demand for credit and reduce investor appetite for the haven of Treasuries, he said.

“These three buyers of U.S. Treasuries will not be there in the future,” Dimon wrote. “If this scenario were to happen with interest rates on 10-year Treasuries on the rise, the result is unlikely to be as smooth as we all might hope for.” JPMorgan is one of the 22 primary dealers that underwrite the U.S. debt and trade with the Fed.

The benchmark Treasury 10-year note yield fell six basis points, or 0.06 percentage point, to 1.70 percent as of 12:56 p.m. New York time, according to Bloomberg Bond Trader data. The 1.625 percent security due in February 2026 rose 17/32, or $5.31 per $1,000 face amount, to 99 11/32. Two-year note yields dropped three basis points to 0.70 percent.

Bear Case

Dimon’s bear case matches the consensus among economists surveyed by Bloomberg, who see yields rising through the course of 2016. The 10-year yield will climb to 1.92 percent by June 30 and 2.25 percent by Dec. 31, based on a Bloomberg survey of economists with the most recent forecasts given the heaviest weighting.

The Federal Open Market Committee reached a broad agreement to go slowly in raising U.S. interest rates due to increasing global risks, even as some policy makers indicated that an increase in the Fed funds rate target range at the April 26-27 meeting “might well be warranted” if economic data came in as expected, according to minutes of Fed’s March meeting published on Wednesday.

The minutes highlighted “that the positive momentum within the U.S. economy is being held back by developments abroad,” said Matthew Cairns, a strategist at Rabobank International in London. “Once the FOMC is satisfied these risks have abated, they will hike, sending Treasury yields back toward what we once considered ‘normal’ levels.”

Yield Forecast

Treasury two-year note yields, which are among the most sensitive to Fed policy, will climb to 1.40 percent in the next 12 months, according to Rabobank forecasts. That level hasn’t been seen since June 2009.

Treasuries returned 3.2 percent in the first three months of 2016, the biggest quarterly gain in almost four years, based on Bloomberg World Bond Indexes. The market rallied as a decline in stocks and oil sent investors to the safest securities.

Japan’s investors pared their holdings of foreign bonds at the fastest pace in almost 10 months as they adjusted positions before the start of the fiscal year. They sold a net 1.6 trillion yen ($14.8 billion) in overseas debt during the week ended April 1, the most since June, according to Ministry of Finance data released Thursday.

Remember Paul Singer’s “bigger short” and the Maestro’s dire warning on bonds? Now we have the CEO of the most powerful bank in the world telling us to get ready for a possible bond market rout as foreign demand for Treasuries dries up and the Fed might hike rates faster than the market expects.

At this writing on Thursday, it doesn’t seem like the bond market is worried about Jamie Dimon’s dire warning (click on image):
As you can see, the yield on the 10-year U.S. Treasury bond keeps dropping and it might retest the 1.57% low it made on February 11th.

So if foreign buyers aren’t snapping up U.S.bonds, who’s buying them at these levels? Lisa Abromowicz of Bloomberg reports on hedge funds’ crush on Treasuries:

Hedge funds are increasingly tying the fortunes of U.S. bonds to the rest of the world, which suggests that Treasury yields will stay low — or go even lower — in the near term.

These investors probably increased their Treasury holdings to record amounts over the past year, according to Federal Reserve data cited by reporters Liz Capo McCormick and Alexandra Scaggs in a Bloomberg News article on Monday. This is significant because these funds generally trade securities more frequently than sovereign wealth funds or central banks, which may make the debt more volatile day to day.

This isn’t a completely surprising development: Hedge funds have more than doubled their assets under management since 2008 and now manage a record $2.9 trillion of assets, according to Hedge Fund Research. They need to find places to invest that money at a time of slowing growth and unfathomably low bond yields in Japan and Europe.
Hedge funds apparently saw a bargain in U.S. debt over the past year as commodity-dependent nations and China liquidated their holdings of the notes to support their markets and economies. In all likelihood, the funds mitigated the technical effects of such significant selling.

The shift does, however, underscore the degree to which the world’s biggest debt market has been transformed in the past few years. Treasuries have gone from being basic staples for big buy-and-hold investors to opportunistic wagers for algorithms and relative-value traders.

And if you pit U.S. government bonds against other developed-market sovereign debt, Treasuries look great by comparison
. Take a look at 10-year U.S. bonds: They yield 1.9 percent, almost 2 percentage points more than rates on similar-maturity Japanese debt and 1.7 percentage points more than similar German notes. Of course, bond buyers also must take into account currency fluctuations and the cost of hedges to eliminate this risk when thinking about relative value between these different types of debt. Sill, it’s hard to see how U.S. Treasury yields can surge if hedge-fund investors are looking for bargains around the world.
About 70 percent of Japan’s government bonds now carry negative yields, according to Bloomberg News reporters Kevin Buckland, Shigeki Nozawa and Yumi Ikeda. Even yields on some European corporate debt have fallen below zero as the region’s central bank embarks on a plan to buy higher-rated company bonds.

There is a risk that greater ownership of Treasuries by hedge funds will make the U.S. bond market more volatile. These funds tend to use leverage to amplify returns, and a wrong-way bet can lead to more pronounced price jumps.

But there’s also the possibility that the Fed data, which puts hedge funds under the rather all-encompassing and rather misleading category of “household and non-profit organizations,” isn’t totally reliable as a gauge of fast-money investments in Treasuries.

“Our sense is that the Treasury monthly flow data are not necessarily calibrated to pick up that direct, real-money investment from overseas,” said Jim Vogel, an interest rate strategist at FTN Financial. In other words, the rapid increase in Treasury holdings being attributed to hedge funds may also include foreign investors racing to the U.S. to escape ever-lower bond yields in their home countries. As long as yields stay so incredibly low around the world, it’s hard to see what would prompt these Treasury owners to sell in a wholesale fashion without other buyers stepping in.

That means while hedge funds could introduce more day-to-day unpredictability into in the Treasury market, over the long term they are unlikely to roil the low yields that are sweeping the globe.

I think there’s a lot of fear mongering when it comes to large hedge funds buying bonds. Moreover, I don’t buy for a second that foreign central banks and sovereign wealth funds aren’t going to be there to buy Treasuries. The new negative normal ensures they will and if there’s another global crisis, they will all be scrambling to buy good old U.S. bonds (classic flight to safety).

As far as the Fed, it sent the signal that an April rate hike is unlikely, and with the Eurozone stuck in deflation, I doubt it will raise rates in 2016. More worrisome, the Fed’s Labor Market Conditions Index is at its weakest level since 2009, diverging from the non-farm payrolls data (click on image):
With corporate profits declining for the first time since the Great Recession, it’s hard to see U.S. job gains continue unabated in this environment and maybe that’s the primary factor driving U.S. bond yields lower.

In fact, Albert Edwards, the notoriously bearish analyst at the French bank Societe Generale, released a note on Thursday highlighting that his “failsafe recession indicator” had stopped flashing amber and had turned to red:

“Newly released U.S. whole economy profits data show a gut wrenching slump. Whole economy profits never normally fall this deeply without a recession unfolding. And with the U.S. corporate sector up to its eyes in debt,” he said in the note (click on image).
Corporate profits in the U.S. are key for Edwards as a driver of the economic cycle. He looks at U.S. whole economy profits before tax and focuses on domestic non-financial companies. He says these are currently leading the business investment cycle and, ultimately, the overall economy into recession.

“Whole economy profits data give a wider and cleaner estimate of the underlying profits environment than the heavily doctored pro-forma quoted company profits data,” he said in the note.

Federal Reserve tightening may not be a necessary condition to catalyze a recession, according to Edwards, who believes that the deep profits downturn is sufficient in itself to push the U.S. economy overboard. He adds that the economy will “surely be swept away by a tidal wave of corporate default” and U.S. corporate debt should be avoided, even more so than the “ridiculously overvalued equity market.”

Clearly the bond market isn’t worried about the Fed or inflation. In my opinion, it’s a lot more worried about the global deflation tsunami, another financial crisis and a full-blown profits recession. This is why I wouldn’t be surprised to see the yield on the 10-year Treasury bond closer to 1% than 2% at the end of the year (those perennially bond bearish Wall Street economists will be proven wrong once again).

Below, Gam Group Chief Economist Larry Hatheway and Western Asset Management Deputy CIO Michael Buchanan discuss JPMorgan CEO Jamie Dimon’s warning that the Fed may move too fast. Hatheway and Buchanan speak on “Bloomberg ‹GO›.”

And CNBC’s Rick Santelli discusses bond prices and yields as well the dollar/yen trade. Just remember what I told you last Friday, as the USD weakens relative to other currencies, especially the yen, it loosens U.S. financial conditions but tightens them in countries trapped in deflation that rely a lot more on exports than the U.S. does.

If this trend continues, something will snap and U.S. bond yields will hit record lows.

How the Panama Papers Exposed Secrecy in the Art Market

How the Panama Papers Exposed Secrecy in the Art Market

By Jake Bernstein

April 7, 2016 | 11:00 am

This article is being published jointly with the International Consortium of Investigative Journalists (ICIJ) and is part of its investigation of the Panama Papers.

After a chance discovery, the grandson of a Jewish art dealer learned that a valuable painting he believed the Nazis had looted from his grandfather might now be in the hands of one of the art world’s most influential families. The discovery launched a court case that leads back to the Panama Papers and illustrates the connection between the international trade in art and offshore tax havens.

The trove of more than 11 million documents from the internal files of Mossack Fonseca, a Panamanian law firm that specializes in building corporate structures that can be used to conceal assets, may be the biggest leak in history.

Dating from 1977 through 2015 and implicating people close to many political and business leaders worldwide, the files also include the largest known cache of inside information on the links between the art market and the shady world of offshore corporations.

The Panama records paint a picture of a thinly regulated industry where anonymity is regularly used to shield all kinds of questionable behavior.

Related: The VICE News Guide to the Panama Papers

The work at the center of the controversy, by Italian artist Amedeo Modigliani, is known as “Seated Man with a Cane.” Modigliani, a young, impoverished alcoholic, died of tuberculosis almost a century ago; his paintings today sell for as much as $170 million. The portrait of a dapper man with a mustache perched on a chair, hands resting upon his walking stick, may be worth $25 million.

Investigators traced the painting to a clan of billionaires that bought the work at auction in 1996. Lawyers working for the grandson, Philippe Maestracci, sent a letter to the Nahmad Gallery in New York, stating that the painting belonged to the grandson, who was entitled to its return. They requested a meeting to discuss the matter. The gallery failed to respond, according to court documents. The grandson sued. Four years later, the two sides’ lawyers are still fighting it out.

The Nahmads have insisted in federal and state court in New York that the family does not possess the Modigliani. An offshore company called International Art Center, registered by a little-known Panamanian law firm, does.

But the Panama Papers — secret records obtained by the International Consortium of Investigative Journalists, the German newspaper Süddeutsche Zeitung and other media partners — suggest that the statement is a legal sleight of hand designed to obscure the true owners of the painting.

The Nahmad family has controlled the Panama-based company, International Art Center, for more than 20 years, the records show. It is an important part of the family’s art business. David Nahmad, the family leader, has been the company’s sole owner since January 2014.

When confronted with documentatation that showed the Nahmads owned International Art Center, David Nahmad’s lawyer, Richard Golub, said “whoever owns IAC is irrelevant. The main thing is what are the issues in the case, and can the plaintiff prove them?”

The central question, Golub said, was whether the grandson can demonstrate this specific painting was stolen from his grandfather. Despite years of battling in court, it’s an issue that has received scant attention from a judge, since both sides have been fighting over who currently owns the painting.

Mossack Fonseca not only helped the Nahmads establish International Art Center in 1995, it provided many of its other clients with the tools to secretly carry out high-end art transactions worldwide for works by artists such as Van Gogh, Rembrandt, Chagall, Matisse, Basquiat and Warhol.

Other well-known art collectors with companies registered through Mossack Fonseca include Spain’s Thyssen-Bornemisza clan, Chinese entertainment magnate Wang Zhongjun and Picasso’s granddaughter, Marina Ruiz-Picasso.

Zhongjun did not respond to a request for comment. Ruiz-Picasso declined to comment. Brojia Thyssen, through a lawyer, acknowledged having an offshore company but said it was fully declared with Spanish tax authorities.

The firm’s records mention enough art to fill a small museum. Along with crucial new evidence in the legal battle over the Modigliani, there are clues in Mossack Fonseca’s files to the mystery of the missing masterpieces of a Greek shipping magnate and previously unknown details behind one of the 20th century’s most famous modern art auctions.

The documents reveal sellers and buyers of art using the same dark corners of the global financial system as dictators, politicians, fraudsters and others who benefit from the anonymity these secrecy zones offer.

In recent years, as art prices have grown dramatically, transactions are often obscured by the use of offshore companies, front men, free trade zones, manipulated auctions and private sales. While secrecy may be exploited legally to avoid publicity, limit legal exposure or ease operations across borders, it can also be employed for nefarious purposes, such as evading taxes and hiding shady ownership histories. Since art is easily transportable, expensive, and poorly regulated, authorities fear that it is often used for money laundering.

Boom times
The current art market boom — and its connection to the secrecy zones within the global financial system — offers more evidence of the spectacular rise of the super rich. Art has become a valuable asset for a global elite eager to stash their money in safe and secluded harbors. In 2015, sales of art exceeded $63.8 billion, according to the trade publication Art Market Report, with top-dollar art experiencing the greatest growth.

The total wealth allocated to art by billionaires worldwide was estimated to be $32.6 billion in 2013, according to data from research firm Wealth-X

“The single best driver of the art market is accumulated wealth,” says Michael Moses of Beautiful Asset Advisors, which tracks art sales. “If high-end wealth is increasing at a faster rate than any other kind of wealth — which it is — these people have excess money to spend on art.”

Roughly half of art transactions are private, strictly between sellers and buyers, Art Market Report estimates. There is little public information about these sales. The rest are done through public auctions, which provide some transparency in regards to price but usually still allow buyers and sellers to remain a mystery, Moses says.

When high-dollar art changes hands, it often lands in a free trade zone known as a freeport. As long as art is housed in the freeport, owners pay no import taxes or duties. Critics worry the freeport system can be used to dodge taxation or launder money, since precise inventories and transactions are not tracked. According to the international professional services firm Deloitte, 42 percent of art collectors it surveyed said they would likely use a freeport. The oldest freeport, with the most art stored, is in Geneva. Its complex of storage facilities is said to contain enough treasure to rival any museum in the world.

Natural Le Coultre, a company owned by Yves Bouvier, rents almost a quarter of the space in the Geneva freeport. Bouvier is also a primary owner of other freeports in Luxembourg and Singapore and a consultant to a facility under construction in Beijing. These interests have earned him the title “the King of the Freeports.”

But it is Bouvier’s activities as a middleman in private deals that have made him the talk of the art world and a target for civil suits. Russian billionaire Dmitry Rybolovlev has filed complaints against Bouvier in Monaco, Paris, Hong Kong and Singapore, accusing him of fraudulently marking up the prices of paintings before selling them. After reviewing the claims, a judge in Singapore lifted a freeze on Bouvier’s assets and a judge in Hong Kong followed suit. Bouvier has strongly denied the charges.

“It was like a steroid injection to the market.”

Not surprisingly, given the number of billionaires and art dealers who use Mossack Fonseca’s services, both men are clients of the firm.

The law firm’s records show at least five companies connected to Bouvier, although none appear to be related to the Rybolovlev case.

Bouvier’s antagonist, Rybolovlev, has two.

Rybolovlev declined to comment. A representative for Bouvier said his client used offshore companies for well-established legal purposes.

The auction game
Many trace the art market’s wild enthusiasm for modern art to a sale on a Monday evening in November 1997. Held at Christie’s in New York, the auction of the Victor and Sally Ganz collection produced record valuations for paintings and proved a milestone in the transformation of art into a global commodity.

“All of a sudden the game was afoot with the Ganz sale in a way that hadn’t happened before,” says Todd Levin, director of Levin Art Group, a New York-based art advisory firm. “It was like a steroid injection to the market.”

The full story behind the Ganz auction has never been revealed. The leaked documents show it involved hidden interests and one of the art world’s favorite offshore middlemen, Mossack Fonseca.

The Ganzes were collectors of works by Pablo Picasso, early champions of Frank Stella, and friends and patrons of Jasper Johns, Robert Rauschenberg and Eva Hesse. After the couple died, their children were forced to sell a collection that had adorned the walls of their childhood home.

It had cost the Ganzes about $2 million over 50 years to assemble. In one evening, the collection sold for a record $206.5 million.

Unknown until now is that the Ganz heirs appear to have sold the collection months before the auction. The key player in the transaction was a corporation based on Niue, a speck of an island in the South Pacific. The company was named Simsbury International Corp.

Simsbury International appears to have been created solely for the Ganz transaction. It was incorporated in April 1997. A month later it purchased the collection. Simsbury’s registered agent was Mossack Fonseca. Employees of the Panamanian law firm served as Simsbury International’s “nominee” directors, stand-ins who controlled the company on paper but who exercised no real authority over its activities. These paper directors signed agreements on the company’s behalf with a bank, an auction house and an art shipping company.

Ownership of the company was held through “bearer shares.” These are simply certificates that allow whoever holds the paper to anonymously transfer or claim their value. Today, they are banned in many countries because of their usefulness to those who want to engage in tax evasion and money laundering.

In a deal struck on May 2, 1997, Simsbury International bought the most valuable Ganz paintings for $168 million from Spink & Son, the London auction house then owned by Christie’s, according to the leaked documents. The exact nature of the arrangement between the Ganz family and Christie’s is not clear from the documents.

A representative of the Ganz family declined to answer questions from ICIJ about the specific details of the auction transaction.

The sale came with a side deal. If the auction for the works brought a higher price, the owner of Simsbury International and Spink & Son would share in the difference.

The man who had power of attorney for Simsbury, and thus exercised control over the company and its bank account, was British billionaire Joseph Lewis. Then the richest man in England, Lewis made his fortune betting on currency movements. He was also Christie’s largest shareholder.

The Ganz catalog stated “Christie’s has a direct financial interest in all property in this sale,” but the terms of that interest were never explained.

Lewis had made a bet that would pay off in multiple ways.

The Ganz auction would help turn 1997 into one of Christie’s biggest years for sales up until then. The auctioneer raked in more than $2 billion that year.

Lewis did not respond to a request for comment.

One of the most expensive paintings sold at the Ganz auction was Picasso’s “Women of Algiers, version O.” It’s one of a celebrated series of fifteen paintings Picasso made in the mid-1950s. In addition to “O,” the Ganz auction featured versions “M,” “H,” and “K.”

Bidding on the works were members of the billionaire Nahmad clan. David Nahmad went home with version “H,” adding it to what is considered one of the largest collections of Picassos in private hands.

An art dynasty
The Nahmads began as a banking dynasty of Sephardic Jews from Aleppo, Syria. In 1948, Hillel Nahmad relocated his wife and eight children to Beirut.

Three of his sons — Giuseppe, David and Ezra — eventually moved to Milan and, by the early 1960s, had become active art dealers. Giuseppe, the patriarch of the family, had a taste for expensive sports cars and, according to his brother David, once dated Rita Hayworth. He also pioneered treating the art business like a stock market, buying and holding paintings until exactly the right time to sell to maximize profit.

He died in 2012. David assumed the mantle of family leader. He and his older brother Ezra both named their sons Hillel after their grandfather. Both go by Helly. Together the four continue the family business.

The two surviving brothers are worth a combined $3.3 billion, according to Forbes. They live in Monaco, among other locales. In addition to currency trading and art dealing, David Nahmad is also a championship backgammon player. Each has a namesake gallery. Ezra’s son has the Helly Nahmad Gallery in London and David’s offspring, an identically named one in New York.

The Mossack Fonseca records indicate the Nahmads were early adopters of the benefits of offshoring art.

Art Basel patrons look at the works of Spanish artist Pablo Picasso and French Artist Yves Klein from the Helly Nahmad Gallery in New York during Art Basel in Miami, Florida, USA, 4 December 2013. (Photo by Rhona Wise/EPA)

Giuseppe Nahmad registered International Art Center S.A. in 1995 through the Swiss bank UBS and the Geneva office of Mossack Fonseca. It may have existed in another form prior to that date. A document in the Mossack Fonseca files mentions International Art Center acquiring the pastel “Danseuses” by Edgar Degas in October 1989.

The Nahmads’ business, which stretches across jurisdictions, is tailor-made for offshoring. With the Nahmad principals based in three countries, galleries on opposite sides of the Atlantic Ocean and most of the paintings stashed in Switzerland, the family requires the kind of legal siloing made possible by offshore companies.

International Art Center is not the family’s only corporate entity with Mossack Fonseca. Giuseppe Nahmad also created Swinton International Ltd., which was registered in the British Virgin Islands in August 1992.

The offshore entities are interconnected, their use a family affair. Giuseppe Nahmad had power of attorney over International Art Center’s UBS bank account as early as 1995. David and Ezra could also sign for the company’s bank account at UBS. For a company bank account with Citibank two years later, Giuseppe co-signed with his brother Ezra Nahmad, the documents show.

In 1995, Swinton International authorized David Nahmad to negotiate the sale of five paintings it owned — an oil on panel by Picasso, “Danseuses” by Degas, two oils on canvas by Henri Matisse and an oil on canvas by Raoul Dufy. Some of the paintings subsequently went on auction at Sotheby’s, identified as being from a “private collection.” Two of the paintings had been the property of International Art Center.

International Art Center’s ownership was initially held in bearer shares, making it impossible to tell who actually owned it. In 2001, a board resolution by Mossack Fonseca nominee directors created 100 shares in the company and granted them to Guiseppe. In 2008, those hundred shares were reassigned in equal portions to David and Ezra Nahmad. A year later, Ezra split his shares with his son Hillel. David did not do the same with his son.

“If they need justification, you know what I mean? You just be like, Oh yeah, I bought a, you know, Picasso drawing or something.”

A hint of tension between David and his son surfaced in 2007, in a rare profile of the family in Forbes. The article quoted David as saying, while “frowning,” that “My son likes publicity a lot. I don’t like publicity.”

His son Helly’s extracurricular activities could have made him an unsuitable shareholder of International Art Center. Like his uncle Giuseppe, Helly had big appetites. The tabloids charted his exploits: models for girlfriends, a floor of multi-million dollar apartments in Trump Tower, movie star pals and high-stakes gambling. None of that was likely a problem until the US Attorney for the Southern District of New York, Preet Bharara, secured an indictment against him in April 2013 for his leadership role in an alleged $100 million gambling and money-laundering ring with ties to Russian gangsters.

Wiretaps in the case caught him discussing how his family art business could be used to hide money. “[S]ometimes a bank needs a justification for a wire, right?” he said, according to a conversation from March 2012, quoted in the government’s sentencing memorandum. “We can just say, Ohh, you are buying a painting. If they need justification, you know what I mean? You just be like, Oh yeah, I bought a, you know, Picasso drawing or something.”

It was never proven in court that the behavior discussed took place. The conversation did not factor into the ultimate charge and the Nahmads’ lawyer said in an interview it has nothing to do with the Modigliani case.

Helly Nahmad pleaded guilty to operating an illegal gambling business in November 2013. A judge sentenced him to a year and a day in prison. He also agreed to forfeit $6.4 million and relinquish rights to a painting by Raoul Dufy. He served five months.

Missing art
The Nahmads are not the only prominent art collecting clan that has found their offshore holdings embroiled in legal actions.

The Mossack Fonseca data provides new insight into a legal dispute involving the Goulandris family, a Greek shipping dynasty that is in the middle of a fight over what happened to 83 missing art masterpieces.

“All told this is about $3 billion worth of paintings,” Ezra Chowaiki, a gallery owner who is helping to bankroll one of the legal claims, told ICIJ in an interview. “It could be the largest collection of missing paintings in history.”

Two lawsuits and a criminal investigation are underway in Lausanne, Switzerland, to try to determine the whereabouts and ownership of the art collection. The cases feature a sprawling and wealthy family at war with itself, shell companies based in Panama, allegations of a forged document and museum-quality paintings by the likes of Van Gogh, Matisse and Picasso.

Some of the paintings have been sold. The seller did not want the history known. In a $20 million sales agreement found in the Mossack Fonseca files for one of the Goulandris paintings, Van Gogh’s “Nature Morte aux Oranges,” there is a section about confidentiality. It forbids revealing “the identity of the parties to this Agreement (including the identity of the Seller’s sole shareholder)” and “any information or documentation pertaining to the Provenance of the Work and the chain of title.”

The art once belonged to Greek shipping tycoon Basil Goulandris. In 1994, Goulandris died of Parkinson’s disease. After his widow, Elise, died in 2000, her heirs learned the couple’s massive art collection had changed hands years earlier. A Panamanian company called Wilton Trading S.A. owned the paintings.

In 1985, according to Basil’s nephew Peter J. Goulandris, Basil sold the entire collection of 83 paintings for the extraordinarily low price of $31.7 million dollars to Wilton Trading. Despite the sale, the paintings never left the couple’s possession. During this period, Basil and Elise Goulandris lent the artwork to museums and sold pieces to dealers with the provenance listed as if the artwork belonged to them.

Much of what is known about Wilton Trading comes from the court cases in Switzerland. It was created in 1981 but didn’t have directors until 1995, ten years after the sales agreement was supposedly signed. According to a Swiss prosecutor, the paper on which the sales agreement is inked didn’t exist in 1985, and no one has been able to prove that any money changed hands.

Peter J. Goulandris told a Swiss court that his late mother, Basil’s sister-in-law Maria Goulandris, was the owner of Wilton Trading.

Through his lawyer, Peter Goulandris declined to comment.

Elise died without offspring. Her niece Aspasia Zaimis believes she deserves a share of the 83 paintings and is suing the executor of Elise’s will.

In November 2004, anonymous companies set up by Mossack Fonseca started the process of selling some of the Goulandris paintings that Wilton Trading had kept.

A family photo of the Goulandris clan sitting at a meal in their home in the Swiss ski resort of Gstaad. A painting by Marc Chagall, “Le Violoniste Bleu,” hangs behind them. (Photo via Goulandris family)

Early the next year, at a Sotheby’s auction in London, a company called Tricornio Holdings sold a painting by Pierre Bonnard called “Dans le cabinet de toilette.” Another company, Heredia Holdings, signed an agreement with Sotheby’s to sell a painting by Marc Chagall, “Les Comédiens.” A third company, Talara Holdings, put up for auction a Chagall painting called “Le Violoniste Bleu.”

Around the same time, the 1888 Van Gogh depiction of a basket of oranges went to California direct marketing tycoon Greg Renker and his wife Stacey in a private sale. The seller was a company called Jacob Portfolio Incorporated.

Renker did not respond to a request for comment.

All four companies were registered just before the transactions and shuttered shortly afterwards, leaving no public trace of who was behind them. The documents now reveal that all four shared a mysterious owner: Marie Voridis.

One of the transactions provides a clue to the identity of Marie Voridis. On October 22, 2004, Voridis transferred all rights to an oil painting by Pierre-Auguste Renoir known in English as “the Seamstress” to Talara Holdings. A few weeks later, Talara Holdings transferred the painting back to Voridis.

In September 2005, a Greek fashion magazine featured the opulent New York apartment of a Greek socialite, Doda Voridis, the sister of Basil Goulandris. Masterpieces by well-known artists decorated the Upper East Side apartment of Voridis, who died in December 2015. In the gossip columns she was always known as Doda but her real name is Marie. Hanging above a handsome armoire in one photo was Renoir’s “the Seamstress.”

War and treasure

The controversy over Modigliani’s “Seated Man with a Cane” began in a time when the fog of war provided the kind of concealment the offshore world offers today. Oscar Stettiner, the Jewish dealer who is alleged to have been the original owner of the painting, fled Paris in 1939, in advance of the Nazis, leaving behind his art collection.

After the city fell, the Germans seized the collection and appointed a French “temporary administrator,” who auctioned off the painting for the benefit of the Nazis, according to legal filings. In October 1944, a U.S. military officer bought the Modigliani in a café for 25,000 francs, according to court documents.

An undated image of Oscar Stettiner. (Photo via Maestracci family)

In 1946, Stettiner filed a claim in France to begin the process of recovering the painting, court documents filed on behalf of his grandson say. He died two years later, with his petition still pending.

The Nahmad’s lawyer Richard Golub disputes this narrative. He questions whether Stettiner ever owned the painting.

The Modigliani stayed hidden within a private collection where it stayed hidden until 1996, when International Art Center bought it at Christie’s in London for $3.2 million, according to documents filed in New York courts. The Helly Nahmad Gallery exhibited the painting in London in 1998 and at the Musee d’Art Moderne in Paris in 1999. Six years later it was part of a Modigliani exhibit at the Helly Nahmad Gallery in New York.

Toronto-based Mondex Corp., a firm that specializes in recovering Nazi-looted art, discovered the painting’s alleged provenance by accident while looking through files in a French ministry. The company helped initiate the legal battle to return it to Philippe Maestracci, Oscar Stettiner’s grandson. Mondex does not disclose its fee for this service.

On Feb. 11, 2015, the Nahmad’s lawyer in the Maestracci case in New York, Nehemiah Glanc, wrote an email to International Art Center’s attorney in Geneva. Glanc was on record as the lawyer for IAC, but he needed some key facts about the company before he could proceed, the leaked records obtained by ICIJ show.

“Please advise as soon as possible as to who is authorized to sign on behalf of IAC,” he wrote in an email.

If the Nahmads had signed the documents as the owners of International Art Center, they would have likely lost the legal protection the company provided.

The attorney in Geneva put Glanc in touch with Anaïs Di Nardo Di Maio in Mossack Fonseca’s Geneva office. Di Nardo could get the signatures of the Mossack Fonseca nominee directors in Panama as long as Glanc’s clients would pay for it. He agreed.

As the case progressed, emails flew back and forth between Glanc and Mossack Fonseca, the leaked documents show. Every time a motion came from International Art Center, the stand-in directors had to sign.

In September 2015, in an austere courtroom in New York, state Supreme Court Judge Eileen Bransten dismissed the Maestracci case. Among her findings, the plaintiffs had failed to properly serve the complaint on International Art Center because they had served papers at the Nahmad Gallery in New York instead of going to Panama. She also ruled that a court-appointed administrator, not Maestracci, was the proper plaintiff. Two months later, the administrator re-filed the case in state Supreme Court in New York as plaintiff.

The new complaint against the Nahmads made another effort to link the family to ownership of International Art Center, which it described as an alter ego of the family enterprise “in a manner so as to confuse and conceal their identities, and hide revenues generated” from the Nahmad family’s art dealing business.

As the case continues on, Modigliani’s 1918 portrait, “Seated Man with a Cane,” is tucked away in the Geneva freeport in Switzerland, another treasure hidden from view.

Follow Jake Bernstein on Twitter: @Jake_Bernstein

Alexandre Haederli, Juliette Garside, Frederik Obermaier and Bastian Obermayer contributed to this story.