Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

HSBC's Money Laundering Scandal (2022)

investopedia.com

Post reply on HN
Print view View original

21–30 of 118 posts

Re: HSBC's Money Laundering Scandal (2022)

#21

Post by chaostheory »

cscurmudgeon wrote: post #19
dig1 wrote: post #10

What banks are doing is "a regular cycle" of modern capitalism (although this sounds like nonsense) - greed. This time was HSBC, yesterday was Deutsche, and tomorrow, who knows. I'd suggest reading a light book from Yanis Varoufakis called "Talking to My Daughter About the Economy: or, How Capitalism Works--and How It Fails" [1], where he explains how this cycle fuels the synergy of a modern economy, capitalism, and…

> What banks are doing is "a regular cycle" of modern capitalism (although this sounds like nonsense) - greed. This is not capitalism though. Like True socialism/communism, True Capitalism has never been tried. This is all crony capitalism with state protection.

Agreed. Also if people are going to constantly bring up late stage capitalism, we should also talk about late stage socialism. Late stage capitalism tends to happen more often and much sooner.

Re: HSBC's Money Laundering Scandal (2022)

#23

Post by rqtwteye »

bitcharmer wrote: post #7
albntomat0 wrote: post #4

Earlier quoted context omitted.

It's possible this was started by some sub-org within HSBC, where 881M would be a large fraction of that org's size. The management layer above them then doesn't look too deeply, or ensure prior compliance procedure, while promoting and giving bonuses to those who hit high numbers.

This is exactly how these things happen. In an organisation that employs quarter of a million employees it's impossible to have perfect transparency and controls everywhere. At this scale you just have to trust that people below you do the right thing. That's not to say there should be no criminal charges for individuals. Just explaining how this transpired.

If the big guys aren’t able to be responsible for bad things they also shouldn’t take responsibility for good things and not get their big paychecks.

In the end if an organization is too big to be controlled and to take responsibility it shouldn’t exist and be broken up.

Re: HSBC's Money Laundering Scandal (2022)

#24

Post by rqtwteye »

specialist wrote: post #12

Asking because I don't know how to find out... Which large banks are scandal free? I don't mean perfidy, like the 2009 mortgage crisis or LIBOR or using bail out money for bonuses or helping clients with tax avoidance. I mean straight up no doubt illegal and criminal stuff. Laundering, bribes, violating sanctions, and so forth.

There companies are simply too big. If they were smaller you could just shut down the offending company which then would make others pay more attention.

Re: HSBC's Money Laundering Scandal (2022)

#25

Post by mirekrusin »

binarymax wrote: post #3

If nobody goes to jail, and the bank retains its licenses, then the fine is meaningless no matter how large. The fine is just seen as a poor investment, which is common in finance. They lost money, and move on to the next investment. People need to go to jail for these transgressions, otherwise there is little disincentive.

Who said poor investment? $1.9 billion is just small cut on return to pay, no?

Re: HSBC's Money Laundering Scandal (2022)

#26

Post by ttctciyf »

According to a Guardian article[1] from 2012, when HSBC copped its $1.9bn settlement for what appears to be its knowing involvement in narco-terrorism, the bank duly expressed contrition and consented to "install an independent monitor to assess reformed internal controls."

The monitoring was part of a five year "deferred prosecution agreement" with the DoJ which allowed to bank to avoid actual criminal prosecution and so continue to operate in the US unhindered.

Later, in 2021, the Guardian reported[2] that HSBC became aware as early as 2016 of a money laundering network "involving 92 HSBC Hong Kong accounts that received $4.2bn worth of payments between 2014 and 2017":

> The bank, which is headquartered in London, would have been expected to disclose the information to an independent monitor brought in by the US Department of Justice (DoJ) in 2012, when criminal proceedings were deferred on condition the bank reform its anti-money laundering checks.

However, while anonymous monitoring team members told the Guardian they had heard nothing of the $4.2bn network, HSBC remained coy:

> HSBC said in a statement that it was illegal to disclose information it had shared with government authorities, and said “specific discussions with our former monitor remain confidential”.

In charge of monitoring HSBC's deferred prosecution agreement was one Lisa Osofsky, a compliance expert and investigator working for Exiger who'd spent three years with Goldman Sachs and seven with Control Risks[3].

Doubtless Osofsky's investigatory skills and robust approach to financial regulation were factors in her 2018 appointment as head of UK's "Serious Fraud Office" (UK's FCC, kind of).

According to HSBC whistleblower Nicolas Wilson[4], as of July 2021 Osofsky was living with her husband in a £3.5m London flat "with an HSBC mortgage".

1: https://www.theguardian.com/business/2012/dec/11/hsbc-bank-u...

2: https://www.theguardian.com/business/2021/jul/28/hsbc-faces-...

3: https://en.wikipedia.org/wiki/Lisa_Osofsky

4: https://twitter.com/nw_nicholas/status/1420692450260172803

Re: HSBC's Money Laundering Scandal (2022)

#27

Post by credit_guy »

photochemsyn wrote: post #18

Why aren't bankers who launder billions for drug cartels given the kind of multi-decade federal prison sentences that 25-yr-old kids smuggling a few kilos of cocaine from Mexico to the United State are? It certainly makes it look like outfits like the FBI and DEA are little more than the enforcement arms of an organized white-collar crime cartel operating out of Wall Street offices, doesn't it? Amusingly James Comey…

> Why aren't bankers who launder billions for drug cartels given the kind of multi-decade federal prison sentences

You mean like these 35 guys who went to prison? Including one who went for 23 years?

[1] https://money.cnn.com/2016/04/28/news/companies/bankers-pris...

Re: HSBC's Money Laundering Scandal (2022)

#28

Post by josu »

photochemsyn wrote: post #18

Why aren't bankers who launder billions for drug cartels given the kind of multi-decade federal prison sentences that 25-yr-old kids smuggling a few kilos of cocaine from Mexico to the United State are? It certainly makes it look like outfits like the FBI and DEA are little more than the enforcement arms of an organized white-collar crime cartel operating out of Wall Street offices, doesn't it? Amusingly James Comey…

It is complicated, for many reasons. A very important one is that responsibility is very diluted.

- A bank executive opens an account to a seemingly legit company.

- The compliance department OKs the account opening.

- A bank teller receives 50k USD in cash every month.

- Another teller receives another 50k USD in cash every month.

- The head of the branch doesn't report strange activity.

- The AML system by the bank don't detect anything strange.

...

Every one of those steps, and many more, are needed for this kind of operation. Who do you send to prison? Do you make the CEO responsible even though she probably had no idea that this was going on? Or do you send the bank teller to prison, who was just doing her job, and maybe even threatened by the cartels?

Even if the branch manager was getting paid by the cartels in order to not file AML reports, the payments were definitely happening in cash, so the conviction would have to be made based on eye-witnesses rather than an actual paper trail (good luck with that).

Another important thing is that if you look at the report, they blame HSBC for failing to properly monitor the transactions, framing the institution more as a victim than an accomplice of the cartels. So in reality, it's the cartels doing the money laundering, the bank is just a gear in the whole system.

Re: HSBC's Money Laundering Scandal (2022)

#29

Post by buitreVirtual »

credit_guy wrote: post #27
photochemsyn wrote: post #18

Why aren't bankers who launder billions for drug cartels given the kind of multi-decade federal prison sentences that 25-yr-old kids smuggling a few kilos of cocaine from Mexico to the United State are? It certainly makes it look like outfits like the FBI and DEA are little more than the enforcement arms of an organized white-collar crime cartel operating out of Wall Street offices, doesn't it? Amusingly James Comey…

> Why aren't bankers who launder billions for drug cartels given the kind of multi-decade federal prison sentences You mean like these 35 guys who went to prison? Including one who went for 23 years? [1] https://money.cnn.com/2016/04/28/news/companies/bankers-pris...

This CNN article is about recovery fund fraud, not money laundering, and more importantly it highlights that only middle to small bank executives, and only lower level executives at too-big-to-fail banks, were punished.

Re: HSBC's Money Laundering Scandal (2022)

#30

Post by [deleted] »

photochemsyn wrote: post #18

Why aren't bankers who launder billions for drug cartels given the kind of multi-decade federal prison sentences that 25-yr-old kids smuggling a few kilos of cocaine from Mexico to the United State are? It certainly makes it look like outfits like the FBI and DEA are little more than the enforcement arms of an organized white-collar crime cartel operating out of Wall Street offices, doesn't it? Amusingly James Comey…

[deleted]
Post reply on HN