Serial Criminals

HSBC is ‘cast-iron certain’ to breach banking rules again, executive admits

by Harry Davies and James Ball, The Guardian

Thursday 2 April 2015 14.50 BST

A senior HSBC executive has privately admitted that the bank is “cast-iron certain” to have another major regulatory breach in the future, and is struggling on multiple fronts to clean up its worldwide operations.

Global head of sanctions Lee Hale – whose recorded comments appear to contrast with public statements from HSBC’s chief executive that the bank has fundamentally transformed itself after recent scandals – said gaps remained in the bank’s compliance with sanctions policies and the screening of certain financial transactions.

…

Hale was meeting with independent lawyers monitoring HSBC as part of a controversial 2012 deal with the US Department of Justice, in which the bank avoided prosecution over sanctions-busting and money-laundering in its Mexican branch in exchange for paying a $1.9bn fine and receiving additional regulatory scrutiny for a period of five years. The deferred prosecution agreement was signed by the then US attorney for the eastern district of New York, Loretta Lynch, who is now Barack Obama’s nominee for US attorney general.

…

Explaining the past difficulty of overhauling sanctions standards at the bank, Hale said HSBC staff were not used to providing the required level of detail for compliance to sign off dispensations. He said: “I think it’s really the first time where we’ve looked to do this with the right level of rigour … the quality of the initial submissions was not great.”

The monitor is required each year to file a lengthy report to the Department of Justice, which in turn files a much shorter summary update to a court in New York. As the agreement was signed in December 2012, the head of the DoJ’s criminal division said HSBC had the “sword of Damocles” over its head should it not follow through on its commitments.

HSBC Violates its Sweetheart Deal and Lynch Praises It

by William Black, New Economic Perspectves

April 2, 2015

HSBC got a sweetheart deal from the Obama administration.  It laundered vast amounts of money for Mexico’s murderous Sinaloa cartel, helped bust sanctions for terrorists and mass murderers, and did not cooperate with the investigation.  The U.S. Attorney in charge of the case, Loretta Lynch, refused to prosecute any of the HSBC bankers or even sue them individually.  Instead, there was a pathetic non-prosecution agreement limited to HSBC.  Lynch is accused of not contacting either of the primary whistleblowers in the case.  The failure to contact one of the whistleblowers has already blown up in Lynch’s face as it became public a few months ago that the governments of the U.S. and Europe were provided many years ago with data on HSBC’s Swiss affiliate that show it was helping terrorists, genocidal leaders, the most violent drug gangs, and tens of thousands of wealthy people evade taxes.  Lynch failed to bring that case or use any of the invaluable data provided by the whistleblower who copied the files from the Swiss bank.

Now comes word that, like Standard Chartered, HSBC is failing to abide even by the pathetic sweetheart deal Lynch gifted HSBC’s criminal managers with.  In the case of Standard Chartered, NY authorities came down on Standard Chartered with at least one foot on the neck.  Lynch is made of considerably less stern stuff.  She failed even to do the most obvious move of extending the agreement with HSBC.

…

HSBC’s violations were a heaven sent opportunity for Lynch to undo the massive embarrassment of the shameful deal she gave HSBC – one of the world’s largest and most destructive criminal enterprises.  She could use the “watchdog” report damning HSBC to state the reality – HSBC’s managers have acted in bad faith and violated the deal that would have got them off with no real prosecution.  Lynch could now prosecute HSBC and its senior managers for all the frauds – including the vast frauds she missed last time because of her failure to talk with the whistleblowers.  And the chances of that happening closely approach zero because Obama chose Lynch to continue Holder’s shameful policies of refusing to prosecute bankers rather than change those policies.

…

Holder’s refusal to prosecute the bankers has led to “repeat offenses on Wall Street.”  Ponder that which DealBook religiously refuses to ponder – if fraudulent bankers find they grow wealthy from the “sure thing” of fraud with no risk of prosecution or even being sued, why wouldn’t they respond with “repeat offenses” that would create a “pattern of corporate recidivism?”  DealBook is very sympathetic to Holder and Lynch.  They are portrayed as “grappling” with the thorny problem that because senior bankers realize that under Holder and Lynch they can grow wealthy and powerful by leading “repeat offenses” they will do so even though they promise “dad” (Holder) or “mom” (Lynch) that they’ll never do it again.  (DealBook hates to use the “f” word to describe elite bankers’ frauds.)

As DealBook (hilariously) portrays the matter, Holder and Lynch “grapple” with this intractable and apparently inconceivable (in the Princess Bride sense of the word made famous by Vizzini) problem that the elite bankers keep on committing massive felonies helping terrorists and the world’s most violent drug gangs even after they look Holder and Lynch (dad and mom) straight in the eyes and solemnly promise to never hit their little brother and steal his toy truck again.  Five minutes later, dad and mom hear a smack followed by the little brother breaking into tears and find big brother with little brother’s toy truck.  Big brother, of course, solemnly says he never hit his little brother and the truck in his hand is not his little brother’s truck.  Big brother, being sophisticated, even pleads in the alternative that if he is holding little brother’s truck it is because little brother gave him the truck.  Except, that we’re not talking about toy trucks, but senior bank officers knowingly funding mass murder and terrorism.

…

The truth is that Holder and Lynch are taking no meaningful efforts against what even DealBook now admits is “the pattern of corporate recidivism” by our most elite bankers.  The only thing they “grapple” with is the bad publicity arising from the stench of that “pattern” of the most despicable and harmful elite financial frauds in history.

There can be no more incriminating indictment of the Nation’s leading federal prosecutors than the fact that even the sycophantic DealBook admits that on Holder and Lynch’s watch a “pattern” of recurrent frauds by our most elite CEOs has emerged – and those frauds commonly involve profiting from the banks aiding the funding of mass murderers.  The administration has managed to turn into reality all those bad novels they sell in airport book stores that describe networks of criminal elite bankers financing terrorists, drug gangs, and venal and brutal kleptocrats with impunity from the laws.