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Secondskin
Amarr
Posted - 2009.08.25 20:17:00 - [91]
 

Things people need to know:

- total value of existing deposits on paper
- total capitalization (deposits - actual cap = deficit to recover)
- your specific plan for covering that distance.

So far the "plan" consists of freezing withdrawals to stabilize existing capitalization, then using that borrowed capital to generate profit with which to make up the gap. Investors and depositors need to know how fast you're going to make money so they can determine how long it will take for you to honor your outstanding obligations.

They also need some kind of reward to offset this spate of managerial malfeasance. Freezing interest is a bad idea; you should shoot whichever director dreamed it up. Interest is the way by which investors are paid for loaning their money to the bank. A freeze means you are holding money and are leveraging it for profit (salaries) without compensation. Even if the depositors get their funds back, you've deprived them of their assets for a period of time and prevented them from using those assets to make more money. That's bad juju.



Things that can come later:

- a description of how you weight your debt assets on risk
- a formal statement on operating capitalization; how much cash you will keep on hand to satisfy normal transaction demands and have a rainy day fund for the occasional withdrawal spree
- your "plan" to recover on defaulted loans

In-game, aside from freezing someone's existing assets, what can you do? You've apparently taken no collateral on your loans and have been counting the outstanding loan values as part of your total capitalization. That's shady bookkeeping at best, fraud at worst.

Outside the game you would have legal resources to pursue debtors, but outside the game you'd also be sued for not allowing people access to their accounts - its a severe breach of contract, if not outright theft.


Stop promising tripled profits and a magic filling-in of the deficit. Start showing real plans and numbers.

Or, as has been suggested, liquidate and go home.

Viper ShizzIe
Habitual Euthanasia
Pandemic Legion
Posted - 2009.08.25 20:18:00 - [92]
 

I have begun the process of petitioning CCP for a bailout, I hope you all will do the same.

Ray McCormack
Nordar Innovations.
Posted - 2009.08.25 20:19:00 - [93]
 

Originally by: Herschel Yamamoto
Looking at the financials, a few things stand out. One, your salaries expense, more than 75B, is really high - all I can remember hearing about EBank salaries was that they were pretty token, maybe a hundred mil a month at the high end. Were those numbers a misunderstanding on my part, lies, or are they legit and you just have a huge salaried workforce?

I have no idea, link me some posts regarding the amounts and I'll get an answer from payroll. It also includes the large costs for the website development.

Originally by: Herschel Yamamoto
Second, even ignoring the 275 bil default, you have another 100+B of defaults on there. Just how many collateral-free loans did you give out, and why? Did you at least charge a pretty savage risk premium for them? Why did you continue making inherently risky low/no collateral loans for such a long time(at least a year and a half, from the looks of it) after the defaults started rolling in?

Ricdic appears to have been in charge of most loans. He left a mess, simple truth. Why he gave out so many loans without collateral is beyond me.

Originally by: Herschel Yamamoto
And third, that loss statement cannot possibly be complete. 1221 B in losses, and 1174 B of negative equity, implies a lifetime gross revenue of 47 billion. Those titan BPCs alone should have made you more than that in the last few months. Can you put together a calculation of lifetime revenues, figure out what the uncounted losses would have to amount to?

Those are all the outgoings that we could possibly list, the rest must be from additional theft, long-term income deficits or reporting errors.

Originally by: Herschel Yamamoto
Also, a broader question. Did the people running EBank see regular financial statements? If so, were they incomplete, screwed-up, or intentionally falsified? Is there any way to tell when these errors crept into your statements, and when your understanding of your financial position became this utterly wrong? Because this information makes it look like you either had a pretty epic fraudster or fool as an accountant, or your financial data was hilariously incomplete from the beginning.

They didn't, there isn't, and about three days after I joined.

Bernie Ebbers
Charles Ponzi School of Business
Goonswarm Federation
Posted - 2009.08.25 20:22:00 - [94]
 

You could always pick option three:
Take your ball and go home.


And honestly, if you've already paid yourselves 75 billion isk, you're half way there.

Ray McCormack
Nordar Innovations.
Posted - 2009.08.25 20:22:00 - [95]
 

Originally by: Secondskin
stuff

Thanks for your suggestions, we'll take them into consideration. But I won't let anybody shoot me.

Kazzac Elentria
Posted - 2009.08.25 20:22:00 - [96]
 

Edited by: Kazzac Elentria on 25/08/2009 20:22:48
Originally by: Ray McCormack

Try, let me know if it doesn't work.



Will do

Quote:

Can you explain this further, not sure what you mean?



Credit unions often require minimum account balances, even to the point where the savings account has a minimum balance that is always there until you close out the account completely. This might allow you to incrementally increase liquidity, and ultimately prevent this **** from happening again.


Quote:

No, the bank won't be allowed to sink further into debt, either public or private.



Understandable and commendable.

One more that came to mind... are all loans from this date forward being collateralized or will you be retroactively adding collateral requirements to existing accounts as well?

Ray McCormack
Nordar Innovations.
Posted - 2009.08.25 20:25:00 - [97]
 

Originally by: Garthran
Also, when it was first suggested something was wrong, before I read this thread, I emptied my account. Should you re-enable interest bearing (soon, I hope. I feel that I am still entitled to some compensation for the deprivation of assets) I will be bearing interest on 0.17 ISK, despite the fact that the bank will still be holding the rest of the ISK. Is there a way to have that withdrawal reversed? Account name is for this character.

What? No. But hopefully our actions over the next year will alleviate your disappointment.

Nemi Lethal
Gallente
DarkStar Armada
Posted - 2009.08.25 20:28:00 - [98]
 

Would ebank allow some debt restructuring service to purchase current Ebank account holders accounts at say 20% value and have those accounts consolidated into a single restructured account.

Grendell
Technologies Unlimited
Posted - 2009.08.25 20:28:00 - [99]
 

ok Ray i updated my first page post, sorry for the delay, you know how work isEmbarassed

Ray McCormack
Nordar Innovations.
Posted - 2009.08.25 20:28:00 - [100]
 

Originally by: Kazzac Elentria
Credit unions often require minimum account balances, even to the point where the savings account has a minimum balance that is always there until you close out the account completely. This might allow you to incrementally increase liquidity, and ultimately prevent this **** from happening again.

I think that's a complex solution to a simple problem, maybe I'm missing something else?

Originally by: Kazzac Elentria
One more that came to mind... are all loans from this date forward being collateralized or will you be retroactively adding collateral requirements to existing accounts as well?

All loans since Ricdic was fired have been backed by collateral. Existing loans without collateral will be glared at until they conform.

Ray McCormack
Nordar Innovations.
Posted - 2009.08.25 20:31:00 - [101]
 

This was your only question not answered in the OP (unless you need me to elaborate on some of them specifically?).
Originally by: Grendell
- Were you specifically brought in on the board to help make this decision, and make a cleanup?

No, I was voted in as Chair whilst still completing the audit (which didn't take months, but rather days), and the true extent of the deficit wasn't yet apparent, just suspected.

Ray McCormack
Nordar Innovations.
Posted - 2009.08.25 20:33:00 - [102]
 

Originally by: Nemi Lethal
Would ebank allow some debt restructuring service to purchase current Ebank account holders accounts at say 20% value and have those accounts consolidated into a single restructured account.

If you can explain how that would even work to the benefit of any party then you have my ear.

Kazzac Elentria
Posted - 2009.08.25 20:35:00 - [103]
 

Originally by: Ray McCormack

I think that's a complex solution to a simple problem, maybe I'm missing something else?



More or less Im getting at perhaps you guys should institute a minimum daily balance on specific accounts, and migrate your savings more towards a CD model instead of the current open savings/sweep that you have now.

It would give you more time in determining how much capital is required at any given moment, and increase your planning options for the future.

Now is more or less the time to rethink the current model

Ray McCormack
Nordar Innovations.
Posted - 2009.08.25 20:37:00 - [104]
 

Originally by: Kazzac Elentria
Now is more or less the time to rethink the current model

Oh fur shure, but we have oodles of time to change the model now.

Herschel Yamamoto
Agent-Orange
Nabaal Syndicate
Posted - 2009.08.25 20:38:00 - [105]
 

Originally by: Ray McCormack
I have no idea, link me some posts regarding the amounts and I'll get an answer from payroll. It also includes the large costs for the website development.


This post - Selene D'Celeste said "...for many months, no one at EBANK received a salary, and even now that salary is token enough that few if any employees can fund a single account on a GTC with said salary."

I can't find any other posts to this effect via a quick Google, and it seems 100 mil might have been a lowball from my memory, but those numbers don't add up to 3-4 bil per month unless you have a much larger salaried staff than I expect. And I hope you didn't spend all that many billions on website development, though to be fair I've never seen a costing for a website like yours.

Originally by: Ray McCormack
Ricdic appears to have been in charge of most loans. He left a mess, simple truth. Why he gave out so many loans without collateral is beyond me.


Ugh. I start to see why people talked about having more trust in EBank after he took his ball and went home.

Originally by: Ray McCormack
Those are all the outgoings that we could possibly list, the rest must be from additional theft, long-term income deficits or reporting errors.


Is your asset list complete, or is there a possibility of a few hundred billion more hiding under some rocks? Assets-liabilities = lifetime revenue-lifetime expenses, so work on getting as good of information on all four as you can, and then figure out the gap that remains.

Originally by: Ray McCormack
They didn't, there isn't, and about three days after I joined.


A bank without accountants. No wonder you're in trouble. Best of luck backtracking through this swamp.

Herschel Yamamoto
Agent-Orange
Nabaal Syndicate
Posted - 2009.08.25 20:42:00 - [106]
 

Originally by: Ray McCormack
Originally by: Nemi Lethal
Would ebank allow some debt restructuring service to purchase current Ebank account holders accounts at say 20% value and have those accounts consolidated into a single restructured account.

If you can explain how that would even work to the benefit of any party then you have my ear.


Current EBank account holder needs money now, sells locked isk for free isk at a serious loss. Buyer gets ownership of locked isk, and makes a bundle if EBank ever opens its doors for withdrawals again. And if you are allowing internal transfers of isk, as you indicated above, this shouldn't be a problem - any existing depositor can offer this service trivially, without even really needing your help.

Athre
Minmatar
The Higher Standard
Posted - 2009.08.25 20:42:00 - [107]
 

Originally by: Herschel Yamamoto

Looking at the financials, a few things stand out. One, your salaries expense, more than 75B, is really high - all I can remember hearing about EBank salaries was that they were pretty token, maybe a hundred mil a month at the high end. Were those numbers a misunderstanding on my part, lies, or are they legit and you just have a huge salaried workforce?


Standard participation was 100m a month. Dont participate you dont get paid. Tellers received higher as they were processing transactions. Since Ric embezzled all salaries were halted.

Quote:
Loans

Ricdic summarily made decisions on loans with out consulting others. Since the change a firm collateral policy has been in place and all loan offerings are posted where board members can post red flags if warranted.


Quote:
Did the people running EBank see regular financial statements?

No. Since Ray has come on board we have a living document where we have been able to see current information.

Quote:
or your financial data was hilariously incomplete from the beginning.

I asked on two occasions for the backup data for Hexxx's EBANK Statements and received nothing. It is my belief he was plugging in numbers dictated by Ric. Complete conjecture on my part.

Athre
Minmatar
The Higher Standard
Posted - 2009.08.25 20:46:00 - [108]
 

Originally by: Herschel Yamamoto

This post - Selene D'Celeste said "...for many months, no one at EBANK received a salary, and even now that salary is token enough that few if any employees can fund a single account on a GTC with said salary."



When I came on board to EBANK a few months in it was decided we were liquid enough to back pay salaries. I dont have exact numbers infront of me but something like 75b /18 months/15 people

Kazzac Elentria
Posted - 2009.08.25 20:46:00 - [109]
 

Originally by: Ray McCormack
Originally by: Kazzac Elentria
Now is more or less the time to rethink the current model

Oh fur shure, but we have oodles of time to change the model now.



I wouldn't say oodles, the freezing is nothing more than a stop gap.

I respect you Ray, tons and think out of everyone here you happen to be one of the few to pull this crap out of the mud. But running a bank is just a slightly bit different than say your previous businesses.

That said, how soon until depositors can get a outlined plan with date goals?

Athre
Minmatar
The Higher Standard
Posted - 2009.08.25 20:50:00 - [110]
 

The plan has % goals, not date goals. Please review the OP

Herschel Yamamoto
Agent-Orange
Nabaal Syndicate
Posted - 2009.08.25 20:51:00 - [111]
 

Originally by: Athre
Originally by: Herschel Yamamoto

This post - Selene D'Celeste said "...for many months, no one at EBANK received a salary, and even now that salary is token enough that few if any employees can fund a single account on a GTC with said salary."



When I came on board to EBANK a few months in it was decided we were liquid enough to back pay salaries. I dont have exact numbers infront of me but something like 75b /18 months/15 people


So the average salary was around a quarter bil a month?

Athre
Minmatar
The Higher Standard
Posted - 2009.08.25 20:57:00 - [112]
 

Originally by: Herschel Yamamoto
Originally by: Athre
Originally by: Herschel Yamamoto

This post - Selene D'Celeste said "...for many months, no one at EBANK received a salary, and even now that salary is token enough that few if any employees can fund a single account on a GTC with said salary."



When I came on board to EBANK a few months in it was decided we were liquid enough to back pay salaries. I dont have exact numbers infront of me but something like 75b /18 months/15 people


So the average salary was around a quarter bil a month?


I think the term average is misleading. Development time was cost in, participation time cost in and tellering transactions. There may be more but since I was not doing payroll I may have missed some of the nuts and bolts. Those are the highlights I recall. A Director that did nothing more than participate would have received 100m a month, retroactive.

Ray McCormack
Nordar Innovations.
Posted - 2009.08.25 21:00:00 - [113]
 

Originally by: Kazzac Elentria
I wouldn't say oodles, the freezing is nothing more than a stop gap.

It's a pretty large gap.

Originally by: Kazzac Elentria
That said, how soon until depositors can get a outlined plan with date goals?

A month or so. The plans are there, they just need to be formulated and put onto paper. I also have other reporting tools that need to be in place before that can happen.

Grendell
Technologies Unlimited
Posted - 2009.08.25 21:03:00 - [114]
 

Yeah sorry about that, just poorly explained by meEmbarassed

- Regarding the Staff salaries, I was wondering if the staff will still be paid the same wages as they were before the freeze. I understand they will still be paid, probably a year down the line or so, was just wondering if there is a review of how much everyone is getting paid? As in will Staff be paid more once salaries start getting paid again, with the increased workload or will they do the opposite.

- As far as the Timeline question goes, I understand it will be roughly a year before you unfreeze. So does that mean you plan on unfreezing once the defecit is in the positive? Or will there be a planned surplus built up by that 1 year where the unfreeze will take place?

cosmoray
Perkone
Posted - 2009.08.25 21:09:00 - [115]
 

Been taking a close look at the financials, and I have 2 questions (sorry if this has already been asked and answered):

1. Total loans on balance sheet = 257B
Profit / Loss sheet, loans = 104B

Is the difference between the two numbers relating to asset back loans (secure) for the profit/loss and the balance sheet shows ALL loans (including those with no security)?

2. Investment (Ventures) = 72B
This shows no profit or loss or information.
Is this a potential asset where you are not sure of its status?

Frug
Omega Wing
Snatch Victory
Posted - 2009.08.25 21:12:00 - [116]
 

Edited by: Frug on 25/08/2009 21:12:31

Just let all the people whining about how this is 'tantamount to theft' take 50% of their deposits back, and everyone else who believes you can fix ebank can agree to the freeze and leave their money where it is.

And every dunce writing ten paragraph rants at you about how you should liquidate to 'restore trust' (a rather stupid opinion. what trust? how would that help?) when they don't even have money invested should just get ignored.


Ray McCormack
Nordar Innovations.
Posted - 2009.08.25 21:12:00 - [117]
 

Originally by: Grendell
- Regarding the Staff salaries, I was wondering if the staff will still be paid the same wages as they were before the freeze. I understand they will still be paid, probably a year down the line or so, was just wondering if there is a review of how much everyone is getting paid? As in will Staff be paid more once salaries start getting paid again, with the increased workload or will they do the opposite.

We'll review that under the consolidation of ventures, but currently nothing has been changed.

Originally by: Grendell
- As far as the Timeline question goes, I understand it will be roughly a year before you unfreeze. So does that mean you plan on unfreezing once the defecit is in the positive? Or will there be a planned surplus built up by that 1 year where the unfreeze will take place?

This was laid out in the OP, see the 85% and 90% comments.

Ray McCormack
Nordar Innovations.
Posted - 2009.08.25 21:15:00 - [118]
 

Originally by: cosmoray
Is the difference between the two numbers relating to asset back loans (secure) for the profit/loss and the balance sheet shows ALL loans (including those with no security)?

The difference is toxic loans that should be defaulted.

Originally by: cosmoray
This shows no profit or loss or information.
Is this a potential asset where you are not sure of its status?

30b is the start of the new consolidated venture, which will report monthly income as it accrues (not forecasts). The remainder is in ventures that are liquidating and thus returning nothing.

Grendell
Technologies Unlimited
Posted - 2009.08.25 21:16:00 - [119]
 

Thanks for your replies Ray, rock on buddy.

Shamasu
Posted - 2009.08.25 21:16:00 - [120]
 

Originally by: Viper ShizzIe
I have begun the process of petitioning CCP for a bailout, I hope you all will do the same.


I like that idea...

When withdrawals are finally open up again (hopefully), I bet there's going to be a massive wave of withdrawals. You might want to come up with some kind of a incentive to stay with the bank once it does reopen, like backpaying at least some of the interest.


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