Cartoon by Keith Tucker
After HSBC admitted to breaking money laundering laws hiding $200 trillion worth of transactions involved with Mexican and Columbian drug cartels as well as groups potentially aligned with terrorists, among other sanctioned nations, all they were fined was a mere $1.9 billion. For London’s largest bank as well as the world’s third largest publicly held bank and sixth largest public company according to Forbes Fortune 500 2012 report, this is just a slap on the wrist.
In response to exposing the U.S. dollar and overall U.S. financial system to such extreme and dangerous funds, the U.S. Department of Justice argued they could only fine a penalty in the equivalent to one month’s profit was because charging them more would do more harm then good. Essentially, a greater penalty would cause detrimental repercussions for the U.S. financial system, potentially rippling into the global economy.
On March 6th, U.S. attorney general Eric Holder confirms the ideology “too big to fail,” by stating,
“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large.”
Many senators have come to terms with the notion that just some of these institutions have become too large. Specifically, Senator Warren wants to take action in combatting the bank’s immunity to jail or any actual detrimental penalties. Warren and other senators sent letters to the Federal Deposit Insurance Corp and the Maryland Attorney General requesting they terminate HSBC’s insurance and the company’s charter all together being that their American operations are based in Maryland. Their objectives with these letters is to eventually break up the banks. These letters are to push financial policy makers to challenge reality by using their own authority given the actualities of laws that have arised for exactly this issue such as the Dodd-Frank Wall Street Reform and Consumer Protection law.
Source:
Taylor, Bartlett. “Is HSBC Really ‘Too Big to Jail’?” Yahoo! Finance. Yahoo! Finance, 11 Mar. 2013. Web. 16 Apr. 2013.
This article essentially puts this scandal into a realistic light: despite an enormous lack of due diligence on the part of HSBC, not much will be done to the bank. In Mark Thompson’s article on CNN Money, the CEO of HSBC, Stuart Gilliver, made $11.1 million despite this record breaking money laundering scandal. The bank’s 2012 pre-tax profit also proved to be indestructible, down a mere 6% than usual. Th
Thompson, Mark. “HSBC CEO made $11 million in scandal-hit year”. CNN Money. March 4 2013. Online. April 17 2013.
http://money.cnn.com/2013/03/04/news/companies/hsbc-ceo-pay/index.html
Good point! I also found something online, please check if it is helpful.
It’s no doubt that this is the largest drug-and-terrorism money-laundering case ever. According to the article I found, it use a huge timeline to further explains “How HSBC hooked up with drug traffickers and terrorists. And got away with it.” Bob Diamond, the former head of Barclays, defined “this is an industrywide problem.”
Also, the author found that HSBC has always been associated with drugs since 1865. HSBC became the major commercial bank in colonial China after the conclusion of the Second Opium War. If you’re rusty in your history of Britain’s various wars of Imperial Rape, the Second Opium War was the one where Britain and other European powers basically slaughtered lots of Chinese people until they agreed to legalize the dope trade (much like they had done in the First Opium War, which ended in 1842).
In April 2003, with 9/11 still fresh in the minds of American regulators, the Federal Reserve sent HSBC’s American subsidiary a cease-and-desist letter, ordering it to clean up its act and make a better effort to keep criminals and terrorists from opening accounts at its bank.
http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214