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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsColor Me SHOCKED! HSBC Is Said to Avoid Charges Over Money Laundering
9:49 p.m. | Updated
State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world's largest banks and ultimately destabilize the global financial system.
Instead, authorities on Tuesday are expected to announce a record $1.9 billion settlement with the bank, according to law enforcement officials briefed on the matter. The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.
While the settlement is a major victory for the government, the case raises questions about whether certain financial institutions, having grown so large and so interconnected, are too big to indict. Four years after the failure of Lehman Brothers nearly toppled the financial system, regulators are still wary that a single institution could undermine the recovery of the industry and the economy.
But the threat of criminal prosecution acts as a powerful deterrent. If authorities signal such actions are remote for big banks, the threat could lose its sting.
http://dealbook.nytimes.com/2012/12/10/hsbc-said-to-near-1-9-billion-settlement-over-money-laundering/?ref=global-home&pagewanted=print
kewhawaii
(59 posts)Jail time is the only thing that will get their attention.
Egalitarian Thug
(12,448 posts)The admission could prove significant.
frylock
(34,825 posts)woo me with science
(32,139 posts)Egalitarian Thug
(12,448 posts)spanone
(135,858 posts)Egalitarian Thug
(12,448 posts)spanone
(135,858 posts)Todays New York Times carries the story that HSBC has escaped criminal prosecution because of fears that an indictment on money laundering charges would undermine the financial system. Its a familiar argument too familiar. But the actions of prosecutors risk undermining the broader social system, with even more serious consequences.
In London last weekend Occupy protestors seized a Starbucks and set up a library. The Occupy cause is fairness, in this case drawing attention to Starbucks legitimate, low tax burden as unfair.
Clearly protestors have a case, as do those who say Starbucks is following the law, not breaking it.
However, the underlying moral issue will not easily be wished away. Occupy and similar movements are interested in changing the law because they see it legitimating bad behavior. In the case of Starbucks, as much as HSBC, they see a system embellished with laws that protect some forms of anti-social behavior. The side effect is that the behavior of all businesses is now being drawn into the net. We havent seen that type of conflict since the 1980s.
http://www.forbes.com/sites/haydnshaughnessy/2012/12/11/too-big-too-indict-hsbc-barclays-and-ubs-set-ugly-precedent/print/
Solly Mack
(90,779 posts)Snort.
spanone
(135,858 posts)Solly Mack
(90,779 posts)Divine Discontent
(21,056 posts)do not get even a day of punishment for showing the Iranians how to hide millions, and giving special boxes to Mexican drug lords that fit into the bank drive thru windows....
appalled at this decision.
banned from Kos
(4,017 posts)Fine.
The HSBC Board of Directors would rather that happen than pay $1.9 billion out in fines.