The context: the pandemic and the collapse in prices

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The frauds of 2020 were brought to light by a market shock. In the spring of 2020 the Covid-19 pandemic caused a collapse in energy demand and a sharp fall in oil prices, which briefly turned negative on certain American markets.¹ Traders holding financed inventories saw the value of their collateral collapse. The banks then demanded additional security or the repayment of their loans.

This shock exposed practices that had been thriving in the shadows for years. As one report noted, the founder of Hin Leong acknowledged in a sworn statement that the company had in reality made no profit in recent years, although it had officially reported a healthy profit for 2019.² As long as prices were rising and credit was plentiful, the concealed losses could be covered by new financing. When prices collapsed and the banks tightened credit, the edifice came down.

This mechanism is an old one. Financial crises reveal the frauds that prosperity conceals. Part C showed how the French Revolution had revealed the fragility of Geneva’s investments in life annuities, and Part D how the crisis of 1931 had revealed the weaknesses of the Swiss banks. The frauds of 2020 belong to this same lineage.

Notes

On 20 April 2020, the May 2020 WTI contract fell from USD 17.73 to a settlement of −USD 37.63 per barrel, the first negative price in its history; Commodity Futures Trading Commission, “CFTC Staff Publishes Interim Report on NYMEX WTI Crude Contract Trading on and around April 20, 2020”, press release of 23 November 2020, cftc.gov. ↩
“Singapore oil trader OK Lim convicted of cheating, abetting forgery”, AFP via Malay Mail, 10 May 2024. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.

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Dr Alexander Ressos, TEP

Rechtsanwalt/Attorney-at-Law

I am a Swiss attorney-at-law and also admitted as a solicitor in Hong Kong and in England & Wales, with almost 25 years of experience.

Together with my multilingual team, including Chinese, Japanese, Korean, Russian, Ukrainian and French native speakers, I advise companies and their owners from around the world on the full range of banking, corporate, commercial and tax law matters in Switzerland, including international tax planning, fiduciary services, and legal family office services including immigration & relocation or real estate investments. My practice has a particular focus on clients from growth and frontier markets in Greater China, Central Asia and the Caucasus, the rest of Asia, the Middle East, Africa and Latin America, and I equally advise clients from Europe and North America. Through an affiliated Swiss trust company, we also take care of the incorporation and ongoing administration of their companies and other structures, including accounting, tax returns and corporate secretarial services, and I serve as a professional director where required. With the support of a network of first-class cooperation partners, I also implement solutions worldwide.

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The context: the pandemic and the collapse in prices

Notes

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