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12-12-2012, 03:34 PM   #1
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Too Big to Jail: Our Banking System's Latest Disgrace

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Some perspective: HSBC sent more than $800 million in bulk cash from Mexico to the United States, a good chunk of which apparently represented proceeds from some of the most notorious Colombian drug cartels. As someone who tried the first narcotics money laundering case involving extradition from Colombia, let me assure you that this is a lot of money, the discovery of which usually generates vigorous prosecutions and lengthy prison sentences. And it wasn’t HSBC’s only dirty business: There were also hundreds of millions of more dollars of illegally disguised transactions with rogue nations such as Iran and Sudan.

Why no criminal charges? Why instead only some remedial measures and a "historical" fine that can be measured in weeks -- not years -- of earnings? It certainly wasn’t for lack of evidence. No, instead the government determined that HSBC is not only too big to fail, but also too big to jail. As the New York Times first reported, even though there were strong voices within DOJ pushing for criminal charges, the big banks' best friends within the government (the Treasury Department, of course, and other unnamed regulators) were too fearful that an indictment could destabilize the global financial system. Yes, it's 2008 all over again. In the name of systemic stability, a megabank again escapes accountability for its actions, rescued by compliant officials.

In some aspects, DOJ's surrender is understandable. Notwithstanding regulatory reform efforts in the U.S. and the UK, the largest banks are in many ways even more systemically dangerous today than when we bailed them out in 2008. This indirect acknowledgment that we have failed to fix the too-big-to-fail problem has potentially dire consequences.

One of the reasons why we have a criminal justice system, of course, is to deter criminal behavior. If you know that you will be punished for putting your hand in the cash register at your local supermarket (or illegally stripping out information from a monetary transaction that identifies the source nation as Iran), you are less likely to do so. But if the government offered a blanket waiver from criminal accountability for a certain group -- let's say all left-handed people over six feet tall or a handful of banks deemed so large and so significant that their indictment could destroy the global financial system -- we would expect that those exempted would no longer be deterred from committing criminal acts.
good reading for those inclined to this sort of thing.....

HSBC Is "Too Big To Jail": Another Banking System Disgrace | The New Republic

12-13-2012, 05:59 PM   #2
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Outrageous HSBC Settlement Proves the Drug War is a Joke | | Rolling Stone

The banks' laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC's Mexican branches and "deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows."

This bears repeating: in order to more efficiently move as much illegal money as possible into the "legitimate" banking institution HSBC, drug dealers specifically designed boxes to fit through the bank's teller windows. Tony Montana's henchmen marching dufflebags of cash into the fictional "American City Bank" in Miami was actually more subtle than what the cartels were doing when they washed their cash through one of Britain's most storied financial institutions.


Washington has been bought and paid for. The $1.9 billion "settlement" is a joke. HSBC should be dismantled and anyone who had anything to do with the money laundering should be in jail. I can't imagine why anyone would want to give politicians in D.C. more power to do anything.
12-13-2012, 09:08 PM   #3
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QuoteOriginally posted by Winder Quote
anyone who had anything to do with the money laundering should be in jail.
Abso-freakin'-lutely!
12-14-2012, 07:08 AM   #4
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More headlines from the banking industry:
Deutsche Bank?s Legal Woes Deepen as Overhaul Hits Profit - Bloomberg

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Two days ago, police raided Deutsche Bank’s Frankfurt headquarters, arresting five employees, in a tax probe involving the sale of carbon-emission certificates in 2009 and 2010 that includes co-Chief Executive Officer Juergen Fitschen and Chief Financial Officer Stefan Krause, who signed tax returns.

Fitschen and Anshu Jain, his co-CEO, are grappling with escalating regulatory probes and litigation stretching from the alleged rigging of interbank lending rates to claims the bank misrepresented products tied to U.S. mortgages. Resulting fines could cut into the company’s capital levels, the lowest of Europe’s four biggest investment banks.

UBS Said to Face Fines of More Than $1 Billion on Libor - Bloomberg

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UBS AG (UBSN), Switzerland’s biggest bank, may be fined more than $1 billion by U.S. and U.K. regulators for trying to rig global interest rates, more than double the amount levied against Barclays Plc, according to a person familiar with the probe.

The fines from the U.S. Commodity Futures Trading Commission, the U.K. Financial Services Authority and the U.S. Department of Justice may be announced as early as next week, said the person, who asked not to be identified because the information isn’t public. The final figures are still being negotiated and could change, three people familiar with the probes said.

Global authorities are investigating claims that more than a dozen banks altered submissions used to set benchmarks such as the London interbank offered rate to profit from bets on interest-rate derivatives or make the lenders’ finances appear healthier. Barclays, the U.K.’s second-biggest bank, agreed to pay 290 million pounds ($467 million) in June to resolve the U.S. and U.K. Libor probes.


12-14-2012, 08:14 AM   #5
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"Corporations are people" too bad the little "people bots" inside them never get it taken out of their pockets...

Hmm does that make them just parasites inside a corporate body.. you know causing harm and sucking up "essential bodily fluids".....
Maybe we should use our medical knowledge to find a cure for THAT disease...
12-14-2012, 09:10 AM   #6
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In the early years of the 19th century, the organized capital market in the United States was largely confined to government bonds (then called "stocks"), along with canal companies and banks themselves. Whatever investment banking existed was therefore concentrated in government debt. From the Civil War until the 1890s, there were virtually no manufacturing corporations; manufacturing and other businesses were partnerships and had not yet reached the size where they needed to adopt the corporate form. The only exception was railroads, the biggest industry in the U.S. The first investment banks, therefore, were concentrated in railroad securities and government bonds.

The first major investment-banking house in the United States was a creature of government privilege. Jay Cooke, an Ohio-born business promoter living in Philadelphia, and his brother Henry, editor of the leading Republican newspaper in Ohio, were close friends of Ohio U.S. Senator Salmon P. Chase. When the new Lincoln Administration took over in 1861, the Cookes lobbied hard to secure Chase the appointment of Secretary of the Treasury. That lobbying, plus the then enormous sum of $100,000 that Jay Cooke poured into Chase’s political coffers, induced Chase to return the favor by granting Cooke, newly set up as an investment banker, an enormously lucrative monopoly in underwriting the entire federal debt.

Cooke and Chase then managed to use the virtual Republican monopoly in Congress during the war to transform the American commercial banking system from a relatively free market to a National Banking System centralized by the federal government under Wall Street control. A crucial aspect of that system was that national banks could only expand credit in proportion to the federal bonds they owned – bonds which they were forced to buy from Jay Cooke.

Jay Cooke & Co. proved enormously influential in the post-war Republican administrations, which continued their monopoly in under-writing government bonds. The House of Cooke met its well-deserved fate by going bankrupt in the Panic of 1874, a failure helped along by its great rival, the then Philadelphia-based Drexel, Morgan & Co.


Investment banks have enjoyed government protection at the expense of the citizens from the very beginning. They are as close as you can get to legalized-organized crime without actually being a branch of the Federal government.
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