Skip to main content

Bank Pays Bribe To Avoid Prosecution

Bank Pays Bribe To Avoid Prosecution
HSBC fine: what does it take for a bank to get prosecuted?
By Nils Pratley
December 11, 2012 "The Guardian" - -  Is HSBC's $1.9bn (£1.2bn) fine enormous or a drop in the ocean?
Well, it's a record for the offence of money laundering and breaking sanctions, which could be said to underline the gravity of the bank's actions. On the other hand, the sum represents about four weeks' earnings given the bank's pre-tax profits of $21.9bn last year.
The financial pain is easily bearable. Indeed, the steady upward progress of HSBC's share price since the scandal exploded in July was unaffected on Tuesday morning.
Shareholders like the idea the affair is settled and they trust that chief executive Stuart Gulliver's new-broom regime won't fall foul of the US department of justice's new independent monitor,k who will assess how the bank implements its pledges to do better.
Gulliver even has a glowing testimonial to wave as HSBC starts its probation period. "Management had made significant strides in improving 'tone from the top' and ensuring a culture of compliance permeates the institution," said the DoJ.
But HSBC investors may also like something else. The New York Times reports that some DoJ officials wanted to bring criminal charges against the bank but eventually decided not to for fear such a move would put the future of one of the world's largest banks at risk and thus threaten global financial stability.
We don't know the weight of that tale and maybe the fear of financial chaos was exaggerated. But the idea that a bank could be "too big to prosecute" is alarming. It sends a message that, whatever the scale of wrong-doing, the world's biggest banks can never lose their licence to operate overnight. Instead, a hefty fine can always make the problem go away.
Is that really a sensible message for regulators to send? Is their hand really so weak? On this occasion, HSBC's words of contrition and promises to behave properly sound sincere. But will that always be the case for all big banks everywhere and forever?
The DoJ should clear up this sub-plot speedily. If money laundering on the scale admitted by HSBC doesn't provoke a prosecution, what would?

Comments

Post a Comment

Popular posts from this blog

Israeli school segregated Ethiopian students » Ethiopian Review

Israeli school segregated Ethiopian students » Ethiopian Review : "The placement of four Ethiopian girls in a separate class from their peers at a Petah Tikva grade school has sparked accusations of segregation on Tuesday morning following a report in Yediot Aharonot. According to ‘Hamerhav’ principal, Rabbi Yeshiyahu Granvich, complete integration of the girls was impossible. The reason being, said municipal workers, was that the students were not observant enough, nor did their families belong to the national-religious movement that the school was founded upon. Among the differences in the daily school life of the girls, a single teacher was responsible to teach them all of their subjects. Worse yet, the four were allotted separate recess hours and were driven to and from school separately. Such action has been labeled by observers as “apartheid.”"
Post a Comment
Read more

Iraqi weapons 'expert' unmasked as a fraud - Independent Online Edition > Americas

Iraqi weapons 'expert' unmasked as a fraud - Independent Online Edition > Americas : "The Iraqi defector whose claims regarding Saddam Hussein's biological warfare capabilities were central to the US government's case for the 2003 invasion, despite repeated warnings that they were dubious, has been unmasked by a television documentary. The informer, codenamed Curveball was Rafid Ahmed Alwan who, in 1999, turned up at a refugee centre in Germany seeking political asylum. He went on to convince the Pentagon he was a brilliant chemist who had helped develop mobile biological warfare laboratories."
Post a Comment
Read more

FT.com / UK - Al-Jazeera journalists become faces of the frontline

FT.com / UK - Al-Jazeera journalists become faces of the frontline : "Ayman Mohyeldin was in a coffee shop joking with colleagues in Gaza City when the first Israeli bomb struck, smashing into a police station just a short distance from where they were sitting. The tremors from the explosion shook the café, but it took a few minutes for the reality to sink in - Gaza was under attack. Since that moment 18 days ago, Mr Mohyeldin and his colleagues at al-Jazeera English, the satellite channel, have worked day and night, providing 24-hour coverage of the Israeli offensive in Gaza and the humanitarian crisis it has triggered. Donning a helmet and a flak jacket, Mr Mohyeldin has become one of the faces of the war, delivering calm and balanced analysis of the chaos and destruction going on around him in a soft American accent."
Post a Comment
Read more