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Goliath bank does the crime, pays David fine

February 7, 2013 - Jim Anderson
Public Citizen, a nonprofit group that describes itself as “the people’s voice in the nation’s capital,” wants banking giant HSBC stripped of its charter to do business as a U.S. corporation.

In December, the U.S. Justice Department announced that HSBC would be fined $1.9 billion for a number of offenses. Among other things, the bank enabled Mexican drug cartels to launder huge sums of cash from the U.S.

HSBC was also accused of moving tainted money for Saudi banks tied to terrorist groups.

It’s the kind of stuff that — if done by a local community bank — would likely result in prison terms, police tape, blackened windows and seized furniture.

It didn’t end that way for HSBC, a London-based multinational banking and financial services company with assets exceeding $2.5 trillion.

Although it was the largest penalty ever imposed on a bank, the $1.9 billion fine against HSBC amounts to about six weeks of profits.

In what reportedly was an agonizing decision for U.S. authorities, there was no criminal prosecution.


HSBC agreed to a deferred prosecution agreement. That means the bank is required to cooperate in any criminal investigation of individual employees.

Except, none have been charged so far.

Pressing criminal charges against HSBC, the Justice Department said, might destabilize the global banking system. (That would be the same system that laundered drug money and funded terrorists?)

There’s something to be said for protecting the jobs of thousand of innocent HSBC employees. But how far can that justification go? No prison for drug dealers who have children to support?

Robert Weissman, president of Public Citizen, says the preferential treatment afforded to HSBC is indefensible.

“It offends any reasonable sense of equal justice under the law,” he says. “Moreover, the minimal fine will reinforce Wall Street’s culture of corruption, providing no deterrent for future wrongdoing.”

Public Citizen is seeking all records that pertain to the DOJ’s decision not to criminally prosecute HSBC. “A full explanation of what considerations drove the DOJ’s decision will enable the public to better appreciate whether prosecutors are making appropriate charging decisions, and if not, whether new legislation should be introduced,” the watchdog says.

As reported by The Guardian, the U.S. investigation concluded that HSBC moved $881 million for two drug cartels in Mexico and Colombia and accepted $15 billion in unexplained “bulk cash” across the bank’s counters in Mexico, Russia and other countries. In some branches, the boxes of cash being deposited were so big the tellers’ windows had to be enlarged.

Besides catering to drug lords, the investigation charged, HSBC ignored rules designed to block transactions involving terrorists and rogue regimes.

No crime in that?

Well, yes, but we’ve secured a fine and reforms.

And kept the banking system stable.



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