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(CNBC)   HSBC agrees to pay $1.9 billion fine for laundering drug money and helping Iran violate banking sanctions. This fine will be paid by the shareholders and no one will go to jail. Crime? Merely a business tax   (cnbc.com) divider line 49
    More: Obvious, HSBC, New York County District Attorney  
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1121 clicks; posted to Business » on 11 Dec 2012 at 12:48 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



49 Comments   (+0 »)
   
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2012-12-10 11:44:29 PM  
Too complicated to follow. Were they funding terrorists?
 
2012-12-10 11:50:56 PM  

AverageAmericanGuy: Were they funding terrorists?


Yes, but a corporation is a person except for legal purposes... It was merely spiritual remembrance of when terrorists founded our nation.
 
2012-12-11 12:11:53 AM  
That's the problem with corporations. It shouldn't be the corporation who pays it, it should be the CEO. And if the CEO can't pay for all of it, then go down to the VP's.

The caution created would solve all the issues.
 
2012-12-11 01:02:37 AM  
They must have called Saul
 
2012-12-11 01:08:03 AM  
Pay $1.9B......And how much did they make from these actions again?
 
2012-12-11 01:11:18 AM  
Crime only counts when little people do it.
 
2012-12-11 01:13:13 AM  
Corporation: An ingenious device for obtaining individual profit without individual responsibility.
- Ambrose Bierce
 
2012-12-11 01:13:34 AM  
Bank should be raped nightly then found shivv'd in the shower
 
2012-12-11 01:27:14 AM  
Corporations are people too my friends. If I did this, how long would I be in prison?
 
2012-12-11 01:27:26 AM  

m3000: That's the problem with corporations. It shouldn't be the corporation who pays it, it should be the CEO. And if the CEO can't pay for all of it, then go down to the VP's.

The caution created would solve all the issues.


No, it should be the corporate shareholders that pay it, and it should be through share dilution, with super investing/voting shares being far more heavily diluted. Those shares should then go over to a sovereign wealth fund managed by the federal government. Should the shares rise to a substantial interest in the company, the government should wield that leverage to place a forensic accountant, or other relevantly skilled person on to the board.

Bad actors come ever more tightly under the government thumb, until they are effectively nationalized, good corporate citizens can buy their way out at a premium (say 20%) and after a probationary period.
 
2012-12-11 01:42:40 AM  

Omnivorous: Corporations are people too my friends. If I did this, how long would I be in prison?


Maximum sentence for just money laundering is 14 years. Dependent on a lot of factors.
 
2012-12-11 01:56:17 AM  
Maximum sentence for just money laundering is 14 years. Dependent on a lot of factors.

On each count? With tens of thousands of transactions? It would make Jean Valjean look like a short-timer.
 
2012-12-11 02:01:40 AM  

Omnivorous: Maximum sentence for just money laundering is 14 years. Dependent on a lot of factors.

On each count? With tens of thousands of transactions? It would make Jean Valjean look like a short-timer.


Couldn't tell you. Got the 14 year number then the included legal explanations started making my head hurt. Theoretical physics looks easy by comparison.
 
2012-12-11 02:17:16 AM  
Willing to bet they made over $20 billion on the deals. The fine usually isn't more than 5%.
 
2012-12-11 02:25:37 AM  

Incontinent_dog_and_monkey_rodeo: Willing to bet they made over $20 billion on the deals. The fine usually isn't more than 5%.


Sounds fair. I mean, we can't take ALL their profits away from them. That would be socialism.
 
2012-12-11 02:27:02 AM  

natmar_76: Sounds fair. I mean, we can't take ALL their profits away from them. That would be socialism.


I mean, yes, they endangered the lives of U.S. Citizens and the security of the nation, but you don't just take a man's money from him and use it for, like, welfare programs or something. That would just be wrong.
 
2012-12-11 02:44:27 AM  
brightsatanicmill.files.wordpress.com

"Yeah, well what are you gonna do about it?"
 
2012-12-11 02:51:27 AM  
www.justaminutellc.com

I am your god and your life's blood and your master and do as I please. I am the law and I am the arbiter of all morals and I say what goes and what doesn't and you will drop to your knees and you will sell your own mother's ass and you will lie and cheat and even murder to worship me and there ain't a f*cking thing you can do about it. And you will grasp for me and do my bidding from womb to tomb and NOTHING you say is important can withstand my whim or remain unsullied by my cold, greasy touch.
 
2012-12-11 03:28:23 AM  
If you think that the economy sucks now, imagine what it would be like without the $trillion or so laundered thru banks and ending up, usually, invested in the US stock market. We'd be screwed blue.
 
2012-12-11 05:44:00 AM  

Omnivorous: Corporations are people too my friends. If I did this, how long would I be in prison?


Are you suggesting we put the bank in a prison? maybe build an island and put the bank out there with napoleon?

Subby - of COURSE the shareholders are going to pay, they were the ones who profited. they are the "people" in the "corporations are people" quote.
 
2012-12-11 05:47:14 AM  

NotARocketScientist: Pay $1.9B......And how much did they make from these actions again?


1.2 billion. read the article.
 
2012-12-11 06:24:09 AM  
As long as $1.2B is less than what they actually made, why would this stop them from continuing in such activity?
 
2012-12-11 06:36:35 AM  

I sound fat: NotARocketScientist: Pay $1.9B......And how much did they make from these actions again?

1.2 billion. read the article.


That's probably just what they got caught laundering. I'll bet it's been going on a long time before they got busted.
 
2012-12-11 07:34:23 AM  
I'm still unclear on why the mob just doesn't fill out the paperwork to become a corporation.
 
2012-12-11 07:41:30 AM  
Increase to customer fees in 5..4..3..2..1..
 
2012-12-11 07:49:20 AM  
That's one way to tax the rich.
 
2012-12-11 07:50:30 AM  

BizarreMan: Increase to customer fees in 5..4..3..2..1..


Yep.

Any increase in cost to a corporation is invariably passed on to the customers. That includes increased labor costs, increased raw material costs, increased taxes and fees*, increased overhead (electricity, water, etc.). It may be passed on to the consumers by increasing the cost per unit, or using cheaper raw materials, or less final finishing, but it will happen.

It's basic accounting.
 
2012-12-11 07:57:20 AM  
From wikipedia (so take it for what it's worth):

Revenue US$ 105.80 billion (2011)
Operating income US$ 21.87 billion (2011)
Profit US$ 16.80 billion (2011)
Total assets US$ 2.556 trillion (2011)
Total equity US$ 166.09 billion (2011)
(Source)

Yeah $1.9 Billion sure hurts... I'm sure they'll never ever do it again. Seriously, we are to corporations as the UN is to terrorists.... "We will be very angry with you, and we will send you a letter telling you how angry we are!"
 
2012-12-11 07:59:26 AM  
"Too big to fail" strikes again. From another article on the topic:

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.
 
2012-12-11 08:04:38 AM  

wombatsrus: "Too big to fail" strikes again. From another article on the topic:

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.


Comic books have it all wrong. Super-Villains aren't individuals with super powers they are multiple people with so much economic power they can do anything they want!

/something like that
 
2012-12-11 08:10:45 AM  
Taker away their license to operate in this country for 5 years.
 
2012-12-11 08:12:19 AM  

wombatsrus: "Too big to fail" strikes again. From another article on the topic:

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.


That plus the Regulators are also shareholders, and wou ld stand to losea lot of money themselves.
 
2012-12-11 08:27:12 AM  
So is HSBC basically the villain from Casino Royale?
 
2012-12-11 08:38:38 AM  
Will the shareholders hold the board accountable and vote one of them off the island? Or will the board pressure senior management resulting in an executive stepping down? Or will the blame fall on a "rouge employee" in an obvious scapegoat maneuver? Find out in the follow-up article next month!

/spoiler alert
//no, no, yes
 
2012-12-11 08:55:55 AM  
And they still have not sent me my new ATM card.
 
2012-12-11 09:07:32 AM  

I sound fat: Are you suggesting we put the bank in a prison? maybe build an island and put the bank out there with napoleon?


Yes. Because "the bank" made the decision to launder drug money and aid a rogue, terrorist nation. Not actual people running the bank who can be imprisoned. People made of flesh and bone and blood and brains who made the actual decision to direct the resources of the institution to enable serious crimes that would land anybody else in prison for decades. bank" did it.

HotWingConspiracy: I'm still unclear on why the mob just doesn't fill out the paperwork to become a corporation.


RICO.

It's not really that your idea is bad, it's just that they sort of mistimed it and now it's too late. Business is all about seizing your opportunities and that's what happens when you don't, I suppose.
 
2012-12-11 09:20:16 AM  

NewportBarGuy: AverageAmericanGuy: Were they funding terrorists?

Yes, but a corporation is a person except for legal purposes... It was merely spiritual remembrance of when terrorists founded our nation.


Yes. And murderers and drug lords and......
 
2012-12-11 09:47:33 AM  

glave27: Omnivorous: Corporations are people too my friends. If I did this, how long would I be in prison?

Maximum sentence for just money laundering is 14 years. Dependent on a lot of factors.


It is okay. They were just money laundering for Iran. You just need to find someone with the last name North to go to jail for you.
 
2012-12-11 10:15:45 AM  
Did someone plead 'da fif'?
 
2012-12-11 10:53:32 AM  
Jail time for executives and workers who facilitated this. Fines to giant corporations that can easily shrug off billion dollar fines are worthless. They pass on the cost anyway.
 
2012-12-11 12:17:03 PM  
Make no mistake. The Tories are back.

One law for you, another for them.

They don't just go away, you have to motivate them with small arms.
 
2012-12-11 05:03:50 PM  

wombatsrus: "Too big to fail" strikes again. From another article on the topic:

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.


So whatever happened to that government agency that was supposed to carve up these banks into easily manageable chunks that could be allowed to fail? Oh, and the corporate death penalty for traitors/criminals? There's the thing in Arizona where they can kill a business for hiring illegal immigrants twice. Why can't you kill a business for laundering terrorist money?
 
2012-12-11 05:38:03 PM  
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.

Isn't that code for "Nunzio and Pauly says we can't do nuttin' about it if we know what's good for us"?
 
2012-12-11 05:45:33 PM  

Insatiable Jesus: Make no mistake. The Tories are back.

One law for you, another for them.

They don't just go away, you have to motivate them with small arms large arms, ordnance and pitchforks.


FIFY
 
2012-12-11 11:00:42 PM  

bunner: Insatiable Jesus: Make no mistake. The Tories are back.

One law for you, another for them.

They don't just go away, you have to motivate them with small arms large arms, ordnance and pitchforks.

FIFY


phyrkrakr: wombatsrus: "Too big to fail" strikes again. From another article on the topic:

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.

So whatever happened to that government agency that was supposed to carve up these banks into easily manageable chunks that could be allowed to fail? Oh, and the corporate death penalty for traitors/criminals? There's the thing in Arizona where they can kill a business for hiring illegal immigrants twice. Why can't you kill a business for laundering terrorist money?


I guess I don't understand why not even any reaction on Fark. About 50 comments instead of the 1000 it deserves. Every single article I read made it get worse. Twice on NPR today heard reasonably conservative banker types saying the sentence was an inexcusable pass for these banks. Why aren't people going to prison? Why aren't people talking military tribunal? Repubs/Dems/Conservative/Liberal? Nope does not apply here. Tory is a good word to describe the politicians and government officials that let this slide.
 
Al!
2012-12-12 12:19:42 AM  
My opinion on the matter is that they should have made the fines large enough to cripple the bank. Too big to fail or not, fark them. What is the incentive to not do this again? Another year of record profits? Why not just let them do whatever they want if you're not going to punish them for breaking the law? Oh, that's what just happened.

Picture a heroin dealer who has $25M. The government catches him and tells him he can avoid jail by giving them $500k. He gives them $500k and he promises he won't do it again. The government takes the $500k, leaves him with all of his heroin and cash and tells him to have a great day.

That's what just happened, except instead of drugs it was drug money.
 
2012-12-12 12:28:48 AM  
Understanding that HSBC is a British bank, so the US doesn't have much jurisdiction, there....

...if they're known to have been funding or "providing aid and comfort" to entities that have declared war on the US, how is that not a free ticket to an OFAC listing?

Close any and all offices they have in the US (and seize all assets existing in the US), and declare them ineligible to conduct any business in the US (and render all debts owed to them by US companies/individuals null and void, while they're at it)

I know, I know...wishful thinking, but, hey, a guy can dream, can't he?
 
2012-12-12 02:28:05 AM  

Jay CiR: Understanding that HSBC is a British bank, so the US doesn't have much jurisdiction, there....

...if they're known to have been funding or "providing aid and comfort" to entities that have declared war on the US, how is that not a free ticket to an OFAC listing?

Close any and all offices they have in the US (and seize all assets existing in the US), and declare them ineligible to conduct any business in the US (and render all debts owed to them by US companies/individuals null and void, while they're at it)

I know, I know...wishful thinking, but, hey, a guy can dream, can't he?


*DING DING DING*
 
2012-12-13 07:09:04 PM  
Just the biggest fine. Most of the `too big to jail' crowd had their snouts in the trough:

http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-dru g -cartels-admitted-in-wells-fargo-s-u-s-deal.html

All one needs to know about these entities (ethically speaking): work the likely fine into the risk premium, take the profits and pay the fine (get to lawyers to clear/drop further DOJ action when fine is paid). Any collateral damages incurred by other entities, e.g., taxpayers, innocent Mexicans, on the way to `maturity'? Fark `em, pay me... `think of the shareholders!!!'

Personal liability of board and executives is about the only way to clean this up. `Self Regulation' is an excellent tool when the `Self' can be the forfeit.
 
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