Little-Acorn
12-11-2012, 07:29 PM
The largest banking firm in Europe and England, HSBC, has been found guilty of massive money laundering for Mexican drug cartels, Iranian terrorists, and others. But no jail sentences will be handed down, and none of the guilty will be punished.
The bank has been judged "too large to fail", so out of fear that they might do some harm to already-rickety European economies, the judges have decided that the only result will be a fine, amounting to less than a year's profits. The fine will be paid by shareholders, not by bank officers or anyone guilty of illegal acts.
It has basically come to the point in Europe where, if you are big enough, with enough people depending on you, The attitude of the government is, "Well, we won't punish you for breaking the law, enabling terrorists and drug kingpins, etc., even if they go on to kill a few thousand people. If you just cut us in on some of the proceeds, we'll let it all go, and you're off the hook. So, send the following amount to us at this account number...."
The HSBC officials said they were sorry. And in an unusually poignant statement, they even promised to say later, that they were sorry again.
It must be nice to be so big that you're above the law.
----------------------------------------------
http://www.usatoday.com/story/money/business/2012/12/11/hsbc-laundering-probe/1760351/
HSBC will pay $1.9 billion for money laundering
Kevin McCoy, USA TODAYShare
Probe focused on the transfer of money on behalf of nations like Iran
2:51PM EST December 11. 2012 - NEW YORK — British banking giant HSBC agreed to pay a record $1.92 billion settlement Tuesday after a broad investigation by U.S. federal and state authorities found the bank violated federal laws by laundering money from Mexican drug trafficking and processing banned transactions on behalf of Iran, Libya, Sudan and Burma .
The settlement, a combination of forfeitures and civil penalties, shows the London-headquartered financial powerhouse for years deliberately channeled hundreds of millions of dollars of the prohibited transactions through its U.S. arm.
"HSBC is being held accountable for stunning failures of oversight — and worse — that led the bank to permit narcotics traffickers and others to launder millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries," said U.S. Assistant Attorney General Lanny Breuer in announcing the largest settlement of its kind.
"The record of dysfunction that prevailed at HSBC for many years was astonishing," said Breuer.
The settlement, part of a deferred prosecution agreement filed in Brooklyn federal court, means HSBC avoids a criminal conviction on money laundering and other major charges — which could have amounted to a financial death sentence by blocking the bank's access to the U.S. banking system.
The settlement is the latest and largest of several deals U.S. authorities have reached with other banks over similar allegations. Federal and state prosecutors retain legal power to prosecute HSBC if the bank fails to comply with banking and oversight reforms included in the agreement, including the appointment of an independent monitor.
"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again," HSBC Group Chief Executive Stuart Gulliver said in a statement earlier Tuesday.
HSBC shares were up 0.5% to $51.82 in afternoon trading Tuesday. The shares also traded higher in London.
"Obviously, $1.9 billion is a very large number, but it's very manageable" without affecting HSBC's bottom line, said Ian Gordon, head of bank research for Investec Securities in London. "It's clearly within market expectations."
Some legal analysts questioned U.S. authorities' failure to force HSBC to plead guilty to criminal charges.
Between 2006 and 2010, the Mexico's Sinaloa Cartel, Colombia's Norte del Valle Cartel and other alleged drug traffickers laundered at least $881 million in illegal proceeds through accounts in HSBC's U.S. arm, the filings show.
"These traffickers didn't have to try very hard," said Breuer. "They would sometimes deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows in HSBC Mexico's branches."
Similarly, HSBC bankers as far back as 2001 cleared U.S. dollar transactions through the bank's U.S. arm while hiding the fact that the money was linked to Iran's Bank Melli. A June 2001 email from an HSBC relationship manager in Europe wrote that Bank Melli had been instructed not to input an "Iranian referenced customer name" with the transaction, thus avoiding any sign of a U.S. legal breach.
The details echoed findings of a July report by the Senate Permanent Subcommittee on Investigations. The panel found evidence that two HSBC affiliates routed nearly 25,000 Iran-linked transactions involving $19.4 billion through the bank's U.S. arm over a seven-year period. Those transactions violated U.S. and British law.
The bank has been judged "too large to fail", so out of fear that they might do some harm to already-rickety European economies, the judges have decided that the only result will be a fine, amounting to less than a year's profits. The fine will be paid by shareholders, not by bank officers or anyone guilty of illegal acts.
It has basically come to the point in Europe where, if you are big enough, with enough people depending on you, The attitude of the government is, "Well, we won't punish you for breaking the law, enabling terrorists and drug kingpins, etc., even if they go on to kill a few thousand people. If you just cut us in on some of the proceeds, we'll let it all go, and you're off the hook. So, send the following amount to us at this account number...."
The HSBC officials said they were sorry. And in an unusually poignant statement, they even promised to say later, that they were sorry again.
It must be nice to be so big that you're above the law.
----------------------------------------------
http://www.usatoday.com/story/money/business/2012/12/11/hsbc-laundering-probe/1760351/
HSBC will pay $1.9 billion for money laundering
Kevin McCoy, USA TODAYShare
Probe focused on the transfer of money on behalf of nations like Iran
2:51PM EST December 11. 2012 - NEW YORK — British banking giant HSBC agreed to pay a record $1.92 billion settlement Tuesday after a broad investigation by U.S. federal and state authorities found the bank violated federal laws by laundering money from Mexican drug trafficking and processing banned transactions on behalf of Iran, Libya, Sudan and Burma .
The settlement, a combination of forfeitures and civil penalties, shows the London-headquartered financial powerhouse for years deliberately channeled hundreds of millions of dollars of the prohibited transactions through its U.S. arm.
"HSBC is being held accountable for stunning failures of oversight — and worse — that led the bank to permit narcotics traffickers and others to launder millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries," said U.S. Assistant Attorney General Lanny Breuer in announcing the largest settlement of its kind.
"The record of dysfunction that prevailed at HSBC for many years was astonishing," said Breuer.
The settlement, part of a deferred prosecution agreement filed in Brooklyn federal court, means HSBC avoids a criminal conviction on money laundering and other major charges — which could have amounted to a financial death sentence by blocking the bank's access to the U.S. banking system.
The settlement is the latest and largest of several deals U.S. authorities have reached with other banks over similar allegations. Federal and state prosecutors retain legal power to prosecute HSBC if the bank fails to comply with banking and oversight reforms included in the agreement, including the appointment of an independent monitor.
"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again," HSBC Group Chief Executive Stuart Gulliver said in a statement earlier Tuesday.
HSBC shares were up 0.5% to $51.82 in afternoon trading Tuesday. The shares also traded higher in London.
"Obviously, $1.9 billion is a very large number, but it's very manageable" without affecting HSBC's bottom line, said Ian Gordon, head of bank research for Investec Securities in London. "It's clearly within market expectations."
Some legal analysts questioned U.S. authorities' failure to force HSBC to plead guilty to criminal charges.
Between 2006 and 2010, the Mexico's Sinaloa Cartel, Colombia's Norte del Valle Cartel and other alleged drug traffickers laundered at least $881 million in illegal proceeds through accounts in HSBC's U.S. arm, the filings show.
"These traffickers didn't have to try very hard," said Breuer. "They would sometimes deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows in HSBC Mexico's branches."
Similarly, HSBC bankers as far back as 2001 cleared U.S. dollar transactions through the bank's U.S. arm while hiding the fact that the money was linked to Iran's Bank Melli. A June 2001 email from an HSBC relationship manager in Europe wrote that Bank Melli had been instructed not to input an "Iranian referenced customer name" with the transaction, thus avoiding any sign of a U.S. legal breach.
The details echoed findings of a July report by the Senate Permanent Subcommittee on Investigations. The panel found evidence that two HSBC affiliates routed nearly 25,000 Iran-linked transactions involving $19.4 billion through the bank's U.S. arm over a seven-year period. Those transactions violated U.S. and British law.