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HSBC, too big to prosecute


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#1 deojusto

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Posted 17 January 2013 - 09:03 PM

http://beta.fool.com...e=TheMotleyFool

(And if you don't feel like reading, here's Jon Stewart)

http://www.hulu.com/...43679#i1,p16,d1

So I heard about this awhile back and I was wondering whether people agree with what the Justice Department did.

In summary, the British Bank HSBC was found to be complicit in laundering money for Iran, Burma, North Korea, Saudi Terrorist organizations, Mexican drug Cartels, and other criminal/sanctioned countries and organizations. However the prosecution of the money laundering case has been deferred in favor of HSBC paying 1.9 billion in fines and agreeing to changes in their behavior and more oversight. It's the largest fine to date that a major bank has paid for illegal activities, but no one person is getting charged. No jail time, no personal fines, no criminal record.

The reason why the Justice department isn't pressing forward to prosecute? HSBC is 'too big to fail'. According to the bank's own lawyers, a successful indictment of HSBC would effectively force the financial giant to crumble in the US, causing economic instability, lost jobs, stock market drops, etc, etc,

Still no one's going to be indicted either, and it's possible no one's even going to lose their jobs. As for the fine, it doesn't seem so imposing when HSBC can earn it back in about a month, and that in one year the cartels made 7 billion dollars worth of cash deposits to HSBC. However I also understand why the Justice Department's decision was made; the additional oversight should (hopefully) stop future money laundering schemes, and prosecuting them would economically hurt a lot of innocent people.

What do you guys think? Is it more important to stick to principle and show banks that they can't get away with stuff like this, or do the ends justify the means when the collateral damage would effect the entire economy? Does lackluster prosecution just encourage them and other banks to keep committing crimes when the benefit far outweighs any possible punishment? Thoughts?

(PS, sorry this was so wordy, or if I misrepresented anything. At least there's no one hour video to watch.)

#2 Mercenaryblade

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Posted 17 January 2013 - 09:51 PM

Well I know i'm going to be called naive for this, but I don't care.

Right is right, these rich S.O.Bs are going to turn around and do it all over again, they have been caught red handed financing some of the worst criminals and terrorists in the world and they just get a slap on the wrist. Now many other big banks and corporations are going to continue doing what they do best, ruin the world.

I think at the very least the bank president should be thrown in jail, and maybe several other high ranking memebers and tried for high treason. Let them serve as an example that no one is above the law no matter how rich you are. That way we can keep the oh so important bank going and give the rest something to think about.

End rant go ahead call me childish and overly simplistic

#3 Ruinus

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Posted 17 January 2013 - 09:55 PM

Seems to me that all the people involved should be jailed, HSBC could probably easily fill in the positions of the people lost with people who aren't criminals.

#4 LoneWolf

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Posted 17 January 2013 - 09:58 PM

Cool article man. Money buys anything...

#5 force_echo

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Posted 17 January 2013 - 10:07 PM

Ah, if only every issue weren't so complicated. I guess that's part of the cruel beauty of life.

#6 Mercenaryblade

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Posted 17 January 2013 - 10:07 PM

Seems to me that all the people involved should be jailed, HSBC could probably easily fill in the positions of the people lost with people who aren't criminals.


My point exactly

#7 deojusto

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Posted 17 January 2013 - 10:22 PM

Well I know i'm going to be called naive for this, but I don't care.

Right is right, these rich S.O.Bs are going to turn around and do it all over again, they have been caught red handed financing some of the worst criminals and terrorists in the world and they just get a slap on the wrist. Now many other big banks and corporations are going to continue doing what they do best, ruin the world.

I think at the very least the bank president should be thrown in jail, and maybe several other high ranking memebers and tried for high treason. Let them serve as an example that no one is above the law no matter how rich you are. That way we can keep the oh so important bank going and give the rest something to think about.

End rant go ahead call me childish and overly simplistic


That doesn't make you naive, its a strong argument. If a company takes in 7 billion dollars worth of drug traffickers money (As deposits and not as profit admittedly, but that's a thin line when they can loan, invest and spend that cash) and they have to pay 2 billion in fines, what's to stop them from saying, "hey 5 billion dollars in the black, let's keep doing this, but try not to get caught if we can". In addition applying the law fairly may be a moral victory on its own.

However what I would point out, (not to you specifically) is that the few individuals who committed the crimes and overseer's who ignored it aren't the only ones who will lose their jobs. Everyone at HSBC in America would be out of a job if they lost their banking license, even the ones who weren't involved. Even Skippy, the one-handed janitor who cleans the golden trough in the executive bathroom. Not to mention the people who banked at HSBC, small businesses who relied on investor money from them, etc.

Though if they kept their license and the organization of HSBC continued to exist while a few key miscreants were punished for the purpose of making a show, I'd think I'd be ok with it. The problem being that anyone like that is probably a top money maker and could spitefully bring the whole thing down if they were singled out.

#8 Ruinus

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Posted 17 January 2013 - 11:00 PM

Though if they kept their license and the organization of HSBC continued to exist while a few key miscreants were punished for the purpose of making a show, I'd think I'd be ok with it. The problem being that anyone like that is probably a top money maker and could spitefully bring the whole thing down if they were singled out.


Punish the guys actually involved, ie the people who actually made those decisions to take that money, gather the entire amount of money that they received from drug cartels and not just a percent of it. If one of those rich criminals decides to destroy the company on the way out that's not the fault of the government, that's all on the rich dude... in which case you could probably fine him for willfully causing some sort of economic disruption through willfull misconduct.

#9 bigballerju

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Posted 18 January 2013 - 12:51 AM

These big banks and corporation giants know there important in the economy which is why they do it. There too big to shut down. Sad really.

#10 Xenerack5

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Posted 12 March 2013 - 03:56 PM

I am torn between the people that would definatley be hurt by prosecuting these dickheads and the people that may if we continue to incentivise this kind of behaviour.




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