Posted on 12/12/2012 5:05:37 AM PST by TigerLikesRooster
HSBC to Pay Record Fine in Money Laundering Case
The U.S. Justice Department has filed court papers alleging felony criminal offenses against one of the world's largest banks, HSBC, in a New York federal court. HSBC announced earlier in the day that it has agreed to pay a record $1.92 billion fine to settle charges connected to a money laundering scheme in the United States.
A U.S. Senate investigation published in July said HSBC had poor anti-money laundering controls in place and had shifted billions of dollars for Mexican drug lords, terrorists and governments under sanctions, including Iran and North Korea.
The fine is the largest penalty ever imposed on a bank, but analysts say the impact will be manageable.
Analyst Alastair McCaig, of IG Markets in London, says HSBC was prepared. "Well, it is certainly not good news, but having said that, in the second and third quarter, HSBC had made provisions of $700 and $800 million, so they had already allocated $1.5 billion towards this," said McCaig. "And at the beginning of November, they had made comments that they felt the fine could ultimately be significantly higher."
A larger concern for the bank, he says, will be regaining its reputation.
In a statement Tuesday, HSBC admitted to a breakdown in controls, and said it accepted responsibility for "past mistakes."
The bank said it had reached a deferred-prosecution agreement, which means no criminal charges will be brought against the bank, but it has had to agree to certain conditions, including the almost $2-billion fine.
The bank says it has also improved its systems to prevent money laundering in the future.
The documents filed by the U.S. Justice Department on Tuesday are expected to be a precursor to the agreement.
Some legal experts have been critical of the deal, saying it is too soft, and the individuals involved should face prosecution.
Lyncean Holdings Managing Director Francis Lun says reaching the settlement has removed uncertainty for the bank. "It will not bankrupt the bank. It means it is taking away one-quarter of HSBC's profit, so they will have to cut dividend and cut cost to get that back," explained Lun. "But it will not cripple the bank. That is the main point."
Banks have been under increased scrutiny since the global financial crisis began in 2008. A number of banks, including Credit Suisse, Lloyds and Barclays, have already been ordered to pay large settlements in connection with allegations that they shifted funds for those on U.S. sanctions lists.
On Tuesday, a second British bank, Standard Chartered, signed an agreement with U.S. regulators to pay a $340 million fine in connection with another money laundering investigation related to Iran.
VOA News / Dec. 12, 2012 08:00 KST
P!
Every major Financial Institution in America has been caught red handed Laundering Money for the Drug Cartels(Government) nobody has ever gone to jail, no business has been closed, they just move to the next Bank and start all over again. If you use a BANK you are contributing to the problem. Close your Account and find a Credit Union.
No one will go to jail.
Like treason, it is all a big laugh now.
The LAW is a farce under Holder and his
colored “justice” which leans for murderers,
terrorists, and Enemies of the American people.
And being multinational businesses (HBSC’s name was originally Hong Kong Banking Services) you have to wonder how much more was laundered that the US doesn’t have any jurisdiction over.
The important question here is how much money they made off the improper business? This is because if they made significantly more than the fine amount transacting with the untouchables then, from a business perspective (reputation concerns aside) it makes sense.
Look for more bankers to be taken to the woodshed. Gotta keep spreading the notion that Capitalism has failed and it’s time to try something else.
As in the Wells Fargo case from a few years ago, I’m sure the fine is a fraction of the profits the bank took in by laundering the drug money. The fine is just the Government’s cut of the Drug Trade. Everybody can now profit from illegal drugs. It’s genius, really.
I may not have read this article slow enough BUT I didn’t see it mentioned that HSBC was a big donor to Obama and his campaign...
From the article:
Obama is robbing the banks to fund the insolvent FHA so FHA can continue to provide sub-prime mortgages for people who will not repay them (illegal aliens included).
The system is set up this way precisely so the banks CAN continue with this behavior. If some high-level bank executive suddenly found himself behind bars, no bank would risk it. This way, the money keeps flowing with minimal impact. A small (relative to the profits of drug money-laundering) fine, the Government gets it’s cut..rinse and repeat. Like I said, it’s pure genius.
And those pesky voters in CO and WA are going to ruin it for everyone!
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