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#1765751 - 12/11/12 12:31 AM HSBC Penalty - $1.9 Billion
Princess Romeo Offline

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As reported on Fox:

HSBC to pay $1.9 Billion in penalties

And the "Oh snap!" quote from the article:

Quote:
Levin also said the Office of the Comptroller of the Currency, the U.S. agency that oversees the biggest banks, tolerated HSBC's weak controls against money laundering for years and that agency examiners who had raised concerns were overruled by their superiors.

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#1765752 - 12/11/12 12:44 AM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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Of course...the next question is...what will the "new and improved and recently slapped around by Congress" OCC look like when they come into all of the small national community banks?
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#1765765 - 12/11/12 12:58 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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#1765923 - 12/11/12 04:22 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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$1.9 isn't the whole story. The amount of money HSBC is throwing at the big 4 to help fix these issues is tremendous. Easily surpassing $100 million. At the end of the day, the hidden costs, consultants, extra staff, new software, etc. really runs the tab up.
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#1765986 - 12/11/12 05:10 PM Re: HSBC Penalty - $1.9 Billion BrianC
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Originally Posted By: BrianC
Of course...the next question is...what will the "new and improved and recently slapped around by Congress" OCC look like when they come into all of the small national community banks?


I have already seen it, and I know one small national community bank that will not be around as soon as the acquisition paperwork is finalized. It was brutal.
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#1765988 - 12/11/12 05:11 PM Re: HSBC Penalty - $1.9 Billion ACBbank
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Originally Posted By: ACBbank
$1.9 isn't the whole story. The amount of money HSBC is throwing at the big 4 to help fix these issues is tremendous. Easily surpassing $100 million. At the end of the day, the hidden costs, consultants, extra staff, new software, etc. really runs the tab up.


Well in the case of HSBC, I have no sympathy. What irks me is that, most likely, we're going to see a doubling down of exam/enforcement efforts in institutions where it really isn't needed.

Ticket quotas anyone?
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#1765989 - 12/11/12 05:13 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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AMC has a television series for community banks that have less than $300-$400 million in assets. It is titled "The Walking Dead".
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#1766252 - 12/11/12 09:31 PM Re: HSBC Penalty - $1.9 Billion rlcarey
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Between HSBC and BP, I think it's time to run the Brits out of America....Again!
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#1766265 - 12/11/12 09:35 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
rlcarey Offline
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I thought we already did that twice.
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#1766287 - 12/11/12 09:51 PM Re: HSBC Penalty - $1.9 Billion BrianC
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Originally Posted By: BrianC
Of course...the next question is...what will the "new and improved and recently slapped around by Congress" OCC look like when they come into all of the small national community banks?


I think we have already been seeing it, following their testimony and smack down over the summer. Our exams that followed were tougher than they'd been in the past.

http://blogs.reuters.com/financial-regul...c-aml-failures/

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#1766356 - 12/12/12 03:40 AM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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It gets better:

HSBC Mexican Branches Said to Be Traffickers’ Favorites

Favorite quote:
Quote:
“These traffickers didn’t have to try very hard,” Breuer said at a press conference in Brooklyn. “They would sometimes deposit hundreds of thousands of dollars in cash in a single day into a single account using boxes designed to fit the precise dimension of the tellers’ windows in HSBC’s Mexico branches.”


nice....
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#1766389 - 12/12/12 01:34 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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Caught a news spot about HSBC last night. Apparently HSBC earned about $38 Billion last year, so is this really more than a blip for them financially? My guess is that the execs are breaking out the bubbly and having a toast.
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#1766397 - 12/12/12 01:45 PM Re: HSBC Penalty - $1.9 Billion Big Dog
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An article that I read yesterday said no criminal charges were filed for fear of destabilizing the entire financial system. smirk
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#1766788 - 12/12/12 07:13 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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TBTF strikes again!

Meanwhile, the smaller community and regional banks will get savaged in their next exams.

It's the cop writing traffic tickets on Sunday at the new stop sign in front of the church all over again.
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#1766843 - 12/12/12 08:23 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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Sorry but TBTF does not apply as Zions,Pacific National Bank, Miami, and First Bank of Delaware FL were all fined for BSA violations as well. I would not consider them large. There is also Standard Chartered who would not be large in NY. PS: I work for a small bank.
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#1767034 - 12/13/12 02:09 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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Originally Posted By: Princess Romeo
Originally Posted By: ACBbank
$1.9 isn't the whole story. The amount of money HSBC is throwing at the big 4 to help fix these issues is tremendous. Easily surpassing $100 million. At the end of the day, the hidden costs, consultants, extra staff, new software, etc. really runs the tab up.


Well in the case of HSBC, I have no sympathy. What irks me is that, most likely, we're going to see a doubling down of exam/enforcement efforts in institutions where it really isn't needed.

Ticket quotas anyone?


I'm not shedding a tear for the bank, it's management team or the BoD, but there are some really good people who working really hard to try and fix this mess. Sadly, they will be losing their jobs in the near future. Nothing ever changes.
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#1767056 - 12/13/12 02:46 PM Re: HSBC Penalty - $1.9 Billion ACBbank
Kathleen O. Blanchard Offline

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Originally Posted By: ACBbank
Originally Posted By: Princess Romeo
Originally Posted By: ACBbank
$1.9 isn't the whole story. The amount of money HSBC is throwing at the big 4 to help fix these issues is tremendous. Easily surpassing $100 million. At the end of the day, the hidden costs, consultants, extra staff, new software, etc. really runs the tab up.


Well in the case of HSBC, I have no sympathy. What irks me is that, most likely, we're going to see a doubling down of exam/enforcement efforts in institutions where it really isn't needed.

Ticket quotas anyone?


I'm not shedding a tear for the bank, it's management team or the BoD, but there are some really good people who working really hard to try and fix this mess. Sadly, they will be losing their jobs in the near future. Nothing ever changes.


I agree. I know folks there who work very hard. This is very difficult for them.
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#1767091 - 12/13/12 03:31 PM Re: HSBC Penalty - $1.9 Billion edAudit
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Originally Posted By: EdAudit
Sorry but TBTF does not apply as Zions,Pacific National Bank, Miami, and First Bank of Delaware FL were all fined for BSA violations as well. I would not consider them large. There is also Standard Chartered who would not be large in NY. PS: I work for a small bank.

You missed the point - the article says no "criminal" charges were filed for fear of destabilizing the banking system.

Wrong message in this case, IMHO.

And as a couple of posters have pointed out, the people who were working hard to fix the problem will likely be scape-goated out of a job while the management team RESPONSIBLE for the environment will continue to get their bonuses for a "job well done."
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#1767107 - 12/13/12 03:46 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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So they basically killed a smaller bank in the last month or two with the death penalty - why not a bigger bank - the market would absorb even one large bank at this point without a "disruption" if they were given time to wind down in a orderly manner. [censored], they all have living wills now anyway.
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#1767114 - 12/13/12 03:56 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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Pulling people out of the ditc...
There are likely multiple reasons no one is criminally charged in the big vs small argument.

In the small bank, it is easy to determine who is culpable, and often the illegal acts are done so intentionally. If the executives say "we will fix this" is can wend it's way through the entire bank in a day or 2.

In the big bank, much harder to assign blame and also prove it was done intentionally...many more hands in the pot, and while each may have a small piece of guilt, no "all encompassing" person. While the executives may have said "we will fix this" it takes much longer to filter through to everyone involved.

Small bank will often be closed if they have a huge penalty to pay, so it is easier to charge an individual rather than force the bank to shutter.

Large bank is profitable and has deep pockets, easier to assess a fine, not cause thousands of layoffs, and still change the illegal patterns - which, is suppossed ot be the ultimate goal.

Not saying it is right, or ethical, but those factors are clearly weighed from a political perspective when these decisions are being discussed.
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#1767156 - 12/13/12 05:12 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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Originally Posted By: Princess Romeo
Originally Posted By: EdAudit
Sorry but TBTF does not apply as Zions,Pacific National Bank, Miami, and First Bank of Delaware FL were all fined for BSA violations as well. I would not consider them large. There is also Standard Chartered who would not be large in NY. PS: I work for a small bank.

You missed the point - the article says no "criminal" charges were filed for fear of destabilizing the banking system.

Wrong message in this case, IMHO.

And as a couple of posters have pointed out, the people who were working hard to fix the problem will likely be scape-goated out of a job while the management team RESPONSIBLE for the environment will continue to get their bonuses for a "job well done."



The only ones who would face criminal charges would be the ones that are curently being scapgoated. One of the articles I have read stated that there was only 4 people reviewing wire transfers and now 430. You can not charge the 426 as they were not there at the time so that would leave the overworked low level 4. These 4 may not have even noticed the redacted info. The ones that redacted could have been working in banks in Iran, NK, Sudan... I do not think we have the ability to arrest in those countries.
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#1767210 - 12/13/12 06:06 PM Re: HSBC Penalty - $1.9 Billion edAudit
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Originally Posted By: EdAudit

The only ones who would face criminal charges would be the ones that are curently being scapgoated. One of the articles I have read stated that there was only 4 people reviewing wire transfers and now 430. You can not charge the 426 as they were not there at the time so that would leave the overworked low level 4. These 4 may not have even noticed the redacted info. The ones that redacted could have been working in banks in Iran, NK, Sudan... I do not think we have the ability to arrest in those countries.


Yeah. That was kind of my point.
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#1768102 - 12/18/12 02:06 AM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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Here are some HSBC documents worth reading.

Deferred Prosecution Agreement

Statement of Facts
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#1768108 - 12/18/12 11:50 AM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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Not bad, they only failed to monitor $200 Trillion in wire transfers. If any bank deserved the BSA death penalty - they did. This is probably even more egregious than Wachovia's dealings with the Casa de Cambios.

It sure puts OFAC checking the cashing of a $50 check over the counter in perspective.
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#1768488 - 12/18/12 08:14 PM Re: HSBC Penalty - $1.9 Billion Princess Romeo
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I read the statement of facts and it is amazing the level of non-compliance the bank engaged in and the most shocking part is that they get to keep doing business…while small banks that went or are going thru a cease and desist order have to offer fewer services or scrutinize every single transaction.
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