Too Big to Jail: Big Banks Can Finance Terrorists and Walk Away Scot-F

[WIP]

First heard this story yesterday, and I can't say I was surprised by it: HSBC receives get-out-of-jail-free card in a real-life game of Monopoly.

The New York Times

reports this week

that megabank HSBC has escaped criminal prosecution for money laundering that probably funded terrorists and narcotics traffickers. Why? Because regulators and prosecutors were petrified that an indictment would undermine the entire financial system. The Times quotes anonymous government sources who confessed fears about bringing formal charges because doing so would be a "death sentence" for the bank. So they let it off the hook.

That’s right, HSBC is officially above the law. Too-big-to-fail has become too-big-to-prosecute.

So, there you have it! What many of us have suspected for years has finally been confirmed: under a fractional reserve currency system, banks are the creators of money, and as they become larger and more consolidated, governments will do nothing to stop them.

And, many observers of the discreet, privileged banking system of anonymous numbered accounts in Switzerland and the Cayman Islands, have long been suspected of holding billions of dollars in profits from the narcotics trade that has created the War On Drugs and led to small time drug dealers and addicts spending their lives in prison. Should we have any remaining doubts that the other major banks are not in the money laundering business also? And so what if they are? They're too big to fail!

Edited December 13, 2012 by WIP

[GostHacked]

The governments collectively are using these banks to launder some money, well that is what I suspect. Other banks I would guess are doing this as well. HSBC just happened to get caught doing it. But governments will continue to allow these practices because they want to keep this ponzi scheme going till the bitter end when it all crashes.

[Shady]

Since when did we start convicting people on probablys?

[Canuckistani]

Since when did we start convicting people on probablys?

You mean money laundering itself is OK? And how about we start prosecuting people on probably, then convict them on reasonable doubt?

[cybercoma]

Since when did we start convicting people on probablys?

Works on you whenever it comes out of a FOX pundit's mouth.

[kimmy]

Since when did we start convicting people on probablys?

Your reflexive need to apologize for corporations might have blinded you to the fact that HSBC has been caught red-handed committing crime. While the part about funding terrorists and drug-lords is only speculation, the part about money-laundering is hard fact. Nobody launders money for a "good" reason, especially for people based in Iran and Mexico.

-k

[eyeball]

Lets face it our whole economy is too big to be honest.

It could probably stand to be broken up too.

Edited December 14, 2012 by eyeball

[CPCFTW]

Your reflexive need to apologize for corporations might have blinded you to the fact that HSBC has been caught red-handed committing crime. While the part about funding terrorists and drug-lords is only speculation, the part about money-laundering is hard fact. Nobody launders money for a "good" reason, especially for people based in Iran and Mexico.

-k

Hsbc didn't "launder money". They processed transactions and ignored red flags that those transactions may have been for money laundering. To say HSBC laundered money is just plain ignorant. HSBC isn't a drug cartel, they have no proceeds of crime to launder.

If I rob someone for $100 and then ask you to give me five $20s change for it, did you launder money? No. You facilitated me laundering money.

HSBC did the same but they have a regulatory duty to detect and prevent money laundering. They didn't "launder money". What an ignorant comment.

[CPCFTW]

The title of the article is also laughable. Get out of jail "free" card.. After paying $1.9B that is.

It's also funny that the author called $1.9B a slap on the wrist.

I'm sure kimmy and the author would be happy if HSBC was shut down and millions of investors lost their investments, millions of customers had to find a new bank, millions of taxpayers had to pay for a legal battle against one of the biggest banks in the world, and thousands of employees at HSBC lost their jobs. That would show the evil entity known as HSBC!

[jacee]

The title of the article is also laughable. Get out of jail "free" card.. After paying $1.9B that is.

It's also funny that the author called $1.9B a slap on the wrist.

I'm sure kimmy and the author would be happy if HSBC was shut down and millions of investors lost their investments, millions of customers had to find a new bank, millions of taxpayers had to pay for a legal battle against one of the biggest banks in the world, and thousands of employees at HSBC lost their jobs. That would show the evil entity known as HSBC!

If there aren't substantial penalties and public scrutiny/consequences, big banks become nothing more than money laundering agencies and accessories to organized crime.

Banks should not be allowed to get so big that their failure would threaten country economies because that undermines the free market.

[bush_cheney2004]

If there aren't substantial penalties and public scrutiny/consequences, big banks become nothing more than money laundering agencies and accessories to organized crime.

And yet this is exactly what government does as well. Banks cannot be incarcerated, but government is more than happy to levy taxes and fines.

[jacee]

And yet this is exactly what government does as well. Banks cannot be incarcerated, but government is more than happy to levy taxes and fines.

The people responsible can be incarcerated.

And the public scrutiny is happening now so there may be further consequences in loss of business.

[kimmy]

Hsbc didn't "launder money". They processed transactions and ignored red flags that those transactions may have been for money laundering. To say HSBC laundered money is just plain ignorant. HSBC isn't a drug cartel, they have no proceeds of crime to launder.

If I rob someone for $100 and then ask you to give me five $20s change for it, did you launder money? No. You facilitated me laundering money.

HSBC did the same but they have a regulatory duty to detect and prevent money laundering. They didn't "launder money". What an ignorant comment.

Your comparison with the mugging would be more apt if you mentioned that you mugged the guy while I was watching. HSBC *knew* they were facilitating the drug trade. They participated in helping people conceal that their money came from illegal sources. That's money laundering. If you've got boxes full of cash you got from selling drugs, you've got a problem. But not at HSBC! Just drop them off, and they'll put the money in your account with no questions asked.

The title of the article is also laughable. Get out of jail "free" card.. After paying $1.9B that is.

It's also funny that the author called $1.9B a slap on the wrist.

I'm sure kimmy and the author would be happy if HSBC was shut down and millions of investors lost their investments, millions of customers had to find a new bank, millions of taxpayers had to pay for a legal battle against one of the biggest banks in the world, and thousands of employees at HSBC lost their jobs. That would show the evil entity known as HSBC!

For you or me, $1.9 billion is a vast amount of money. For HSBC, a $1.9 billion fine works out to less than 2 months of profits. Some perspective is in order.

More to the point, the $1.9 billion doesn't come out of the pockets of the people who actually broke the law. It comes out of the pockets of the shareholders.

-k

[bush_cheney2004]

The people responsible can be incarcerated.

Good luck with that. Government made the practical decision not to pursue criminal proceedings against individuals and run with the "dirty money". Shuttering or crippling the bank would have far more serious, unintended consequences.

And the public scrutiny is happening now so there may be further consequences in loss of business.

Perhaps, but that is just the price of business in a regulated banking environment. AML laws are about money, not justice.

Edited December 14, 2012 by bush_cheney2004

[Shady]

Your reflexive need to apologize for corporations might have blinded you to the fact that HSBC has been caught red-handed committing crime. While the part about funding terrorists and drug-lords is only speculation, the part about money-laundering is hard fact. Nobody launders money for a "good" reason, especially for people based in Iran and Mexico.

-k

Nope. Following our legal system shouldn't be characterized as reflexive. It should be standard practice. You base too much on emotional responses.

[Sleipnir]

Since when did we start convicting people on probablys?

More so after 9/11.

[Shady]

More so after 9/11.

Oh ok.

[WIP]

The title of the article is also laughable. Get out of jail "free" card.. After paying $1.9B that is.

It's also funny that the author called $1.9B a slap on the wrist.

I'm sure kimmy and the author would be happy if HSBC was shut down and millions of investors lost their investments, millions of customers had to find a new bank, millions of taxpayers had to pay for a legal battle against one of the biggest banks in the world, and thousands of employees at HSBC lost their jobs. That would show the evil entity known as HSBC!

What a joke! I hope you at least get payed for carrying water for these leeches, like many right wing bloggers are able to cash in on through the web of right wing think tanks.

Latest profit numbers from a quick search are at the BBC: 13.8 billion Pounds....which according to the latest pound/U.S. dollar conversion rate of 1.62 = 22.36 billion dollars. So, that fine isn't even 10% of HSBC's annual profits. If that's not a slap on the wrist for crimes that have lesser mortal sitting in solitary with lifetime sentences, I don't know what is!

Edited December 14, 2012 by WIP

[Canuckistani]

The point of the article is that no bank should be big enough that if they were convicted of crimes and collapsed because of it, it would drag the whole banking system under with it. There need to be firewalls in place so that banks are exposed to the hazards of their activities, whether moral or legal. This bank was only not charged because the investigators were too afraid of what might happen.

[CPCFTW]

What a joke! I hope you at least get payed for carrying water for these leeches, like many right wing bloggers are able to cash in on through the web of right wing think tanks.

Latest profit numbers from a quick search are at the BBC: 13.8 billion Pounds....which according to the latest pound/U.S. dollar conversion rate of 1.62 = 22.36 billion dollars. So, that fine isn't even 10% of HSBC's annual profits.

The bank also paid $4B in taxes, plus employs over 250,000 people who also presumably pay taxes. Thank god for those profits!

If that's not a slap on the wrist for crimes that have lesser mortal sitting in solitary with lifetime sentences, I don't know what is!

Here are Canada's penalties for non-compliance with AML regulations:

FINTRAC may disclose cases of non-compliance to law enforcement when there is extensive non-compliance or little expectation of immediate or future compliance. Criminal penalties may include the following:

Failure to report suspicious transactions: up to

$2 million and/or 5 years imprisonment.

Failure to report a large cash transaction or an electronic funds transfer: up to $500,000 for the first offence, $1 million for subsequent offences.

Failure to meet record keeping requirements: up to $500,000 and/or 5 years imprisonment.

Failure to provide assistance or provide information during compliance examination: up to $500,000 and/or 5 years imprisonment.

Disclosing the fact that a suspicious transaction report was made, or disclosing the contents of such a report, with the intent to prejudice a criminal investigation: up to 2 years imprisonment.

Maximum penalty is $2M or 5 years imprisonment in Canada, and you think $1.9B is a slap on the wrist.

Like you said, what a joke! Your knowledge that is. "Solitary with lifetime sentences"...

Edited December 14, 2012 by CPCFTW

[WIP]

The bank also paid $4B in taxes, plus employs over 250,000 people who also presumably pay taxes. Thank god for those profits!

You and the other rightwingers' slavish devotion to corporate power never ceases to amaze me!

Here are Canada's penalties for non-compliance with AML regulations:

Maximum penalty is $2M or 5 years imprisonment in Canada, and you think $1.9B is a slap on the wrist.

Like you said, what a joke! Your knowledge that is. "Solitary with lifetime sentences"...

If they had to serve five years in a real prison, that would be a start! But, just because Canada has one standard for the rich, and one for everyone else, that makes it okay in your books for bank executives to get away with laundering billions of dollars in narcotics trafficking.

“We accept responsibility for our past mistakes,” said HSBC Chief Executive Stuart Gulliver. “We have said we are profoundly sorry for them, and we do so again.”

So, should the crime bosses also get away with an apology and paying a fine? How about the average addict, who could spend a life sentence in prison for the crime of being drug-dependent....why not give them the same option?

[CPCFTW]

You and the other rightwingers' slavish devotion to corporate power never ceases to amaze me!

If they had to serve five years in a real prison, that would be a start! But, just because Canada has one standard for the rich, and one for everyone else, that makes it okay in your books for bank executives to get away with laundering billions of dollars in narcotics trafficking.

“We accept responsibility for our past mistakes,” said HSBC Chief Executive Stuart Gulliver. “We have said we are profoundly sorry for them, and we do so again.”

So, should the crime bosses also get away with an apology and paying a fine? How about the average addict, who could spend a life sentence in prison for the crime of being drug-dependent....why not give them the same option?

All the responsible execs were fired. I wouldn't mind seeing them prosecuted, but I think many are out of US jurisdiction. We're talking about the corporate entity though.

[Bonam]

The title of the article is also laughable. Get out of jail "free" card.. After paying $1.9B that is.

It's also funny that the author called $1.9B a slap on the wrist.

I'm sure kimmy and the author would be happy if HSBC was shut down and millions of investors lost their investments, millions of customers had to find a new bank, millions of taxpayers had to pay for a legal battle against one of the biggest banks in the world, and thousands of employees at HSBC lost their jobs. That would show the evil entity known as HSBC!

$1.9B is not much to a large corporation like HSBC, it really isn't. It's about 1% of their market cap. Now, I don't know how the $1.9B was calculated, but if it was intended to be punitive, it would need to be a lot higher to have any real impact. It needs to be a severe blow to profits and operations for at least a few years in order to deter other banks from doing the same. Should be something like $5 billion/year for 5 years given the scale of HSBC.

Additionally, there should be a criminal investigation into the activities to determine the few individuals most directly responsible, and said individuals should face criminal trials and possibly jail time.

Edited December 15, 2012 by Bonam

[WIP]

All the responsible execs were fired. I wouldn't mind seeing them prosecuted, but I think many are out of US jurisdiction.

Is that stopping the Obama Administration from killing people they want to eliminate today? They are assassinating enemy Mujaheddin labelled as terrorists, accused drug cartel chiefs, and in at least one extra-judicial killing - the drone execution of Anwar al Awlaki's 16 year old son - nothing more than revenge and sheer spite....but for some reason, they can't pull the same trigger on criminal corporate executives who leave a trail of death and destruction because of their actions in pursuit of more money! And I would include former BP CEO Tony Hayward on that list, since his crime caused the immediate deaths of 11 men, and an untold number of people living along the Gulf, or eat fish and shellfish from the Gulf and will die in the next 20 or 30 years, because BP disregarded warnings about the indiscriminate overuse of Corexit - which will sank the leaked oil to get it out of immediate sight, while both the oil residues and the corexit chemical will keep seeping up to the surface and washing ashore for years to come. There are numerous potentials for criminal charges including manslaughter and murder as well, if BP's operations in Azerbaijan are included in the list of charges. Other major oil companies operating in third world countries are guilty of similar crimes that they are never prosecuted for!

We're talking about the corporate entity though.

Who runs the corporate entity? And who profits most greatly from the corporate entity? And if corporations are granted rights of personhood, why aren't corporations subject to the death penalty like flesh and blood persons are in some states? Back before corporations became people, a corporation chartered in the U.S. more than a century ago, would have its charter stripped from the owners, and its assets would be auctioned off to new owners who were under the same obligations as the offending corporation. No surprise that bankers and billionaires of the Guilded Age made changing those rules priority 1.

[kimmy]

Maximum penalty is $2M or 5 years imprisonment in Canada, and you think $1.9B is a slap on the wrist.

Like you said, what a joke! Your knowledge that is. "Solitary with lifetime sentences"...

So did any individual at the bank pay a fine? Did any individual at the bank do any jail time?

The bank itself might have paid a fine, but since the people actually involved in breaking the rules didn't pay the fine or face legal consequences, there's no deterrence.

-k