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« OCC Issues Cease And Desist Order Against Citibank For Repeated Money-Laundering Violations | Main | PHOTO OF THE DAY - The 'Hard Times' Panic Of 1837 »

Analysts Warn That HSBC’s Money-Laundering Fine In U.S. Could Amount To $1 Billion

Even if that amount exceeds HSBC’s rake from illegal drug-peddling activities, the bank isn’t troubled in the least, since it can easily cover the fine with the $3.5 billion backdoor bailout it received as an AIG counterparty.

That leaves $2.5 billion net for candy, strippers and bonuses.


HSBC said in its 2011 annual report that fines relating to money laundering issues could be “significant”. There has been speculation among analysts that the bank could be hit with a higher charge than the $619m ING, the Dutch bank, agreed to pay to settle accusations it violated US sanctions by helping Iranian and Cuban companies move billions of dollars through the US financial system.  Some have suggested it could be as much as $1bn.

Mr Gulliver warned that HSBC was likely to face further action from other US authorities in coming months.

h/t Cheyenne






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Reader Comments (9)

When do we start sharpening the guillotines ?

Jul 12, 2012 at 3:55 PM | Unregistered Commentermick
A former employee of HSBC in New York has 1,000 pages of customer account records he claims are evidence of an international money-laundering scheme involving hundreds of billions of dollars by HSBC.

A mere billion dollar fine could be considered just a tax or the cost of doing business...
Jul 12, 2012 at 10:49 PM | Unregistered CommenterS. Gompers

Yup. Here's a link to the guy with the docs and the docs themselves. Ugly stuff...

Jul 12, 2012 at 11:14 PM | Unregistered CommenterCheyenne
The fine will be paid in derivative scrip and accepted as gold.
Jul 13, 2012 at 12:57 AM | Unregistered CommenterHoward T. Lewis III
When does the " War on Psychopaths" start ?
Jul 13, 2012 at 1:39 AM | Unregistered Commentermick
Fines may not deter companies from manipulating markets



Officials in the nation’s capital and California’s hailed this week’s announcement of a $410 million settlement with JPMorgan Chase as a win for consumers and a warning to big companies that try to manipulate electricity markets not to do it again.

But JPMorgan didn’t admit any wrongdoing in the case, and no executives were charged, prompting protest from Capitol Hill that the action didn’t go far enough. Some corporate governance experts say that large financial firms have come to consider such fines simply part of the cost of doing business.

Big fines alone can’t change the culture of high-risk trading that brought down firms such as Enron and nearly all of Wall Street, said Chip Pitts, a lecturer at Stanford Law School who specializes in corporate responsibility.

“The regulators are fooling themselves if they think this will be a deterrent,” he said...

...The settlement came only eight years after California recovered $1.5 billion from Enron, a bankrupt Houston energy trader, in the mother of all power-market manipulations. Enron’s activities were blamed for a 2000-2001 electricity shortage that led to widespread blackouts, the bankruptcy of the state’s largest utility and the defeat of its governor in a recall election. The energy crisis cost the state an estimated $40 billion to $45 billion.

But unlike bankrupt Enron, profitable JPMorgan can pay its fine, and, based on last year’s net profits, still keep $20 billion.

A company spokesman declined to comment. In June, JPMorgan announced that it was exploring the sale of its energy trading business, acquired in 2008 through the takeover of troubled rival Bear Stearns.

Jon Wellinghoff, the chairman of FERC, said in a statement that the commission’s actions had been effective. “Look at the results,” he said.

Congress gave FERC, the federal energy regulator, penalty authority in the Energy Policy Act of 2005 to deter the kinds of abuses committed by Enron. Last month, it fined British bank Barclays for allegedly manipulating energy markets in western states from 2006 to 2008. The $435 million sum was the largest in the agency’s history.

Note: the chairman of FERC is full of shit. Barb and I will expound on FERC and Patrick Wood III in the near future.
Aug 4, 2013 at 9:47 AM | Unregistered Commenterjohn
How a big US bank laundered billions from Mexico's murderous drug gangs



As the violence spread, billions of dollars of cartel cash began to seep into the global financial system. But a special investigation by the Observer reveals how the increasingly frantic warnings of one London whistleblower were ignored

Pay attention to my last comment (above).
Aug 5, 2013 at 10:54 AM | Unregistered Commenterjohn
How a big US bank laundered billions from Mexico's murderous drug gangs

As the violence spread, billions of dollars of cartel cash began to seep into the global financial system. But a special investigation by the Observer reveals how the increasingly frantic warnings of one London whistleblower were ignored



"Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank's $12.3bn profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 – up 1% on the week of the court settlement.
Aug 5, 2013 at 10:59 AM | Registered CommenterJohn
In all honesty, HSBC should have had all assets forfeited upon discovery that they were laundering untold billions for the drug cartels. Wrist slap justice at its finest.http://nypost.com/2013/12/23/government-robbed-me-of-33m-in-bitcoins-silk-road-pirate/
Dec 23, 2013 at 1:13 PM | Unregistered Commenterskinflint

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