Maybe, just maybe, there may be some criminal charges individually and corporately.
2/9 – New York Times – Justice Department Is Seeking Felony Pleas by Big Banks in Foreign Currency Inquiry
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Maybe some criminal prosecutions this time around from HSBC and forex investigationsRead More »
Maybe some criminal prosecutions this time around from HSBC and forex investigations Read More »
Superb map of where the laundered money at HSBC is coming from. Used with permission.
Graph posted on February 11. Published by Martin GrandJean. You can find it at SwissLeaks: the map of the globalized tax evasion
From the linked article: Map of the HSBC accounts amounts per country. Full size here (CC) license – freely reusable with link to this post.
Fine print in the corner you may not be able to read: …
Good grief.
Not only are we talking tax felons. We’re talking cheap tax felons.
2/10 – The Guardian – HSBC files: Swiss bank aggressively pushed way for clients to avoid new tax – Part 3. HSBC developed a specialized product they presented to lots of their clients. Lots bought it.
Problem: If you have money hidden in Switzerland, there is a tax treaty that requires the banks to withhold 15% on the interest earnings and turn the withholding over the British treasury. No reporting of individual names or amounts, just one lump sum sent to England. Apparently letting the crown have 15% of your interest is too much for some blokes.
Wrinkle: …
The coverage by The Guardian and ICIJ mentioned in yesterday’s post is kicking off a lot of coverage. Twitter is lighting up with a few hundred tweets in a few minutes, but I’m learning that interest typically fades in a few days. By Friday, the twitterverse will be on to its next outrage.
Here are two more articles I found interesting. First is on UBS maybe having more trouble on aiding tax evasion. Second, when stock analysts say one of the too big to fail banks is too big to manage, it is capitalists making the criticism, not people outside the business world.
2/4 – Wall Street Journal – UBS Faces a New Tax-Evasion Probe – Authorities Investigate Whether Swiss Bank’s Clients Used ‘Bearer Securities’ to Hide Cash
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More good stuff on the banking fiascos – 2/10/15 Read More »
Major breaking news this weekend is the extent of shady dealings at HSBC’s subsidiary in Switzerland. Lots of dirty money accepted for deposit at the bank and lots of assistance provided to money launderers and tax evaders.
HSBC says they have cleaned up their act since 2008.
2/8 – The Guardian – HSBC files show how Swiss bank helped clients dodge taxes and hide millions – Part 1. Large volume of leaked files show a HSBC subsidiary in Switzerland actively helped clients evade taxes.
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HSBC: One of the ATMs available to tax evaders Read More »
Oh, and bring in some jelly donuts when the deal is getting close and you can bridge that last third of a billion difference.
S&P reached a settlement with the Department of Justice and a bunch of states over the ratings S&P gave to mortgage securities before the financial crisis. Top line settlement amount is $1.5B. See Wall Street Journal article, S&P to Pay $1.5 Billion to Resolve Crisis-Era Litigation.
Be advised the ridicule and abuse in this post will soon flow thick…
Settlement negotiations
Starting point from the DoJ side was $5B and acknowledgement of wrongdoing. S&P wanted under a billion and acknowledgment of the whole deal being in retaliation for S&P downgrading the federal credit rating.
My version of the back and forth haggling that got them to common ground:
$5B.
Drop admission of guilt.
DoJ: Okay, $3.2B. S&P: We’ll break the billion mark.
DoJ drop to $1.5B and S&P up to $1.2B.
Bring in those yummy donuts. You know, the ones with the jelly filling and sprinkles. Then drop the retaliation claim and agree on $1.3B.
Done? Yup.
Everyone’s happy. Nobody has to admit they did anything wrong. Both claim complete, total vindication.
That’s my loose paraphrase. For the unabridged version, see the WSJ article How the Justice Department, S&P Came to Terms.
A different look at the sequencing
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No massive publicity on the banking front, but there are ongoing issues in getting money laundering under control and the ongoing investigations of manipulating foreign exchange rates.
1/14 – Wall Street Journal – Forex Probe Finds New Signs of Potential Wrongdoing – Scope of the Forex fiasco and related U.S. Federal investigation is growing. Investigators have found new issues and that the manipulation of exchange rates may go beyond trading desks.
There is also a wider investigation running that I’ve seen mentioned: …
More good stuff on banking fiascos Read More »
Here are a few possibilities for the record level of settlements for bank in ’14: Wrapping up the legacy issues from the financial crisis. Regulators are getting serious about pushing big banks to improve their operations. Or maybe regulators just want more money. Or maybe banks are getting worse at obeying the law.
Some articles for you to ponder:
12/30 – Wall Street Journal – For Banks, 2014 Was a Year of Big Penalties – Here’s my interpolation of the fines and legal costs for the largest banks, as presented in the article’s graph:
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What is behind the record $56 billion in bank fines in 2014?Read More »
What is behind the record $56 billion in bank fines in 2014? Read More »
A few links and comments of interest to auditors: continued investigations of TBTF banks, get an engagement letter, and more on The Economist article:
12/9 – Guardian – Standard Chartered under pressure as US regulators relaunch investigation – …
More good stuff for auditors – 12/29 Read More »
Those big banking disasters won’t go away. Ripple effects keep showing up, this time from breaking money laundering rules.
A number of US soldiers wounded in terrorist attacks while in Iraq have sued a number of banks for their role in facilitating the money transfers to fund the attackers.
This ties in to the money laundering fiasco of banks allowing Iranian businesses, government, and individuals to access the U.S. banking system in spite of a U.S. ban on doing so. Some of my previous posts in this tag.
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Ripple effects from banking fiascos – 2 Read More »
That’s the conclusion from Keefe, Bruyette & Woods in a report they just released, which I can’t find online.
The analysts there calculated that the big bank and brokerage firms made $152B in profits from 2001 through 2010 (please no comments on the century and decade actually starting in 2000).
Fine and civil settlements paid by 43 banks …
Those big banking fiascos just won’t go away. Ripple effects keep showing up.
Here are two ripples that I noticed just yesterday from the money laundering mess, one for Bank of Tokyo and another with BNP.
11/18 – Wall Street Journal – Bank of Tokyo to Pay $315 Million to N.Y. Regulator – …
Ripple effects from banking fiascos – 1 Read More »
Just a few more tidbits from the forex settlements announced yesterday.
Some more ideas from the WSJ coverage in their article, Citigroup, J.P. Morgan Take Brunt of Currencies Settlement.
Three agencies are still investigating: The Federal Reserve, Department of Justice, and NY Department of Financial Services. DoJ and DFS will probably have the big fines and sanctions.
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A few updates on the Forex settlement Read More »
Three major regulators announced settlements with six banks for their now admitted manipulation of foreign exchange rates. At least two regulators (Department of Justice and NY Department of Financial Services) still have investigations open. One bank, Barclays, withdrew from the settlement.
The scheme ran for six years, starting after the fall 2007 meltdown and running until a year after the Libor settlements were underway.
Here is my recap of the fines by bank with calculation of the annualized cost, all amounts in U.S. dollars: …
Looks like it is really hard to prove individual culpability for conspiracy when a banker’s employer was aiding tax evasion. (I don’t use the word alleged in a sentence saying a bank committed a crime because UBS has already ‘fessed up and paid a $780,000,000 fine.)
11/4 – Wall Street journal – Acquittal in UBS Case Sets Back Tax Probe – A senior executive of UBS was on trial for allegedly helping Americans evade income taxes. The feds alleged that the banker ran a conspiracy to launder money and evade taxes, with said conspiracy involving cloak and dagger techniques to hide from authorities that the bank was knowingly and intentionally laundering money for its clients.
Didn’t turn out well for those who want to see a new federal penitentiary built to hold all the bankers who belong in jail.
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