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Why is it always fines? Shouldn't this type of stuff result in jail time? The people who organised the cartel have likely already got their bonuses and couldn't care less if the bank is fined
Not only is it only fines but now we are discounting the fines for cooperating.
I wish -- just once -- there would be a story where a bank is actually punished in a meaningful way. Look at this way: A bank is fined $x for doing an action which generated $y. If x The libor scandal cost the U.S. at least $6 billion in interest charges (y) and another $4 billion just to unwind their positions. Whereas the banks have only been fined $2.1 billion to date (x). When you take inflation into account and…
> The libor scandal cost the U.S. at least $6 billion in interest charges (y) and another $4 billion just to unwind their positions. Got a reference for that? Not being a dick just interested to read more. For that amount of damage to have occured in Libor is an interesting and important concept. An open way to show its calculation should exist.
Finding actual damages proved really difficult on this subject.
There are a lot of comments along the lines of "why are the fines so low" or "why is nobody doing jail time?" And the answer to both those questions is: stiffer punishment would require stronger proof. Cartel activity, like much white collar crime in general, is extremely difficult to prosecute, because the difference between totally legal conduct and illegal conduct comes down to what people are thinking. Instead of…
We're already there. https://news.ycombinator.com/item?id=8519060 It might help if we spread the cheer to more high-end criminals.
Earlier quoted context omitted.
> The libor scandal cost the U.S. at least $6 billion in interest charges (y) and another $4 billion just to unwind their positions. Got a reference for that? Not being a dick just interested to read more. For that amount of damage to have occured in Libor is an interesting and important concept. An open way to show its calculation should exist.
No problem, I got it from Wikipedia which in return cites a bloomberg article. http://en.wikipedia.org/wiki/Libor#Aftermath Finding actual damages proved really difficult on this subject.
Definitely worth more investigation. Definitely a part of our world that needs more light shed on it. Got to be some interesting angles there too ;)
There are a lot of comments along the lines of "why are the fines so low" or "why is nobody doing jail time?" And the answer to both those questions is: stiffer punishment would require stronger proof. Cartel activity, like much white collar crime in general, is extremely difficult to prosecute, because the difference between totally legal conduct and illegal conduct comes down to what people are thinking. Instead of…
He goes into great deal regarding why the most egregious white collar crimes such as HSBC laundering money for the Mexican cartels / terrorist organizations ended with a simple 1.9 billion dollar fine (http://www.reuters.com/article/2012/12/11/us-hsbc-probe-idUS...), no one going to jail, and the bank not even having to admit they did anything wrong.
There are many reasons why (after all, he wrote a whole book about it) but to list a few
1. The Justice Department does not want to risk losing a case (for political reasons)
2.The unit in charge of investigating this type of crime within the justice department is staffed with defense lawyers who dont think out of the box (thanks to obama)
3.the banks committing these crimes are large, multinational institutions so there are complexities around the fact of who committed the crimes, what jurisdiction they were committed in, etc. the most disturbing chapter in the book was a about a hedge funds harassing (literally harassing) a Canadian insurance firm Fairfax financial. The judge ended up throwing out that case because it took place in NJ but the crimes took place in NYC: http://www.swtriallaw.com/press-releases/new-jersey-court-cl...
4.the banks have a lot of money to spend on lawyers
5.the same lawyers that are defending the banks create the laws and regulations they live by (Eric Holder and a few others)
6.this memo: http://www.huffingtonpost.com/2013/06/04/eric-holder-1999-me... - that is, anything that might hurt innocent bystanders—when deciding whether to bring a case against a corporation. "Prosecutors may take into account the possibly substantial consequences to a corporation's officers, directors, employees, and shareholders,"
7. That banks argue that a prosecution could be economically disruptive because they are "too big to fail" so basically if you hurt them, you are hurting everyone else also.
It is really a fascinating, and in some ways depressing, read. Honestly, this is nothing compared to the banks getting caught fixing the LIBOR rate a few years back, and no one went to jail for that anyways.
There are a lot of comments along the lines of "why are the fines so low" or "why is nobody doing jail time?" And the answer to both those questions is: stiffer punishment would require stronger proof. Cartel activity, like much white collar crime in general, is extremely difficult to prosecute, because the difference between totally legal conduct and illegal conduct comes down to what people are thinking. Instead of…
> Frankly, you don't really want to live in a world where the government can impose criminal penalties on businesses for such loose facts as these. We're already there. https://news.ycombinator.com/item?id=8519060 It might help if we spread the cheer to more high-end criminals.
There are a lot of comments along the lines of "why are the fines so low" or "why is nobody doing jail time?" And the answer to both those questions is: stiffer punishment would require stronger proof. Cartel activity, like much white collar crime in general, is extremely difficult to prosecute, because the difference between totally legal conduct and illegal conduct comes down to what people are thinking. Instead of…
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There are a lot of comments along the lines of "why are the fines so low" or "why is nobody doing jail time?" And the answer to both those questions is: stiffer punishment would require stronger proof. Cartel activity, like much white collar crime in general, is extremely difficult to prosecute, because the difference between totally legal conduct and illegal conduct comes down to what people are thinking. Instead of…
It's not that the proof isn't there, it's that the SEC itself has become corrupted by the people it's supposed to enforce laws against.
On a side note, I am still livid about the Libor scandal. Why the hell is a rate set in London allowed to influence the American dollar so greatly?!
There's no point whatsoever to fine banks, its stupid beyond belief. First, its like issuing a speeding ticket to a billionaire, second, the money does not come from the pocket of the offender, and third, if the unimaginable happens and some bank goes belly up because of this, then we, the taxpayers will bail it out. Again.