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Another slap on the wrist. No one goes to jail because of Deferred Prosecution Agreements HSBC got fined about half that when they caught laundering money for

Another slap on the wrist. No one goes to jail because of Deferred Prosecution Agreements HSBC got fined about half that when they caught laundering money for the Mexican cartels a few years back. True story: HSBC had to design special teller windows because the standard ones were too small to fit the sacks of money that were being brought in and laundered. If you want to know why these guys don't go to jail, pull up a bottle of lithium and sit down with The Chickenshit Club.

diogenescynic 8y ago
Moneyland is another good book on this subject.
AtHeartEngineer 8y ago
It was 4.2 billion not million, it probably should have been more, but that's definitely not a slap on the wrist.
- branchless 8y ago
  It's literally nothing to the top brass.
- repsilat 8y ago
  Right. For context, that's around 9% if their $48 billion market cap. Much worse than sending any one person to jail. Also: in the US, I've heard the "value of saving a life" for some decision calculations to be assumed at ten million dollars. That's $200k per year for 50 years. (In New Zealand, from talking to some civil engineers, it is a lot lower.) At the American price, the fine is worth 420 human lives.
  - black_puppydog 8y ago
    I agree that this is more than a slap on the wrist, but I doubt that it's more effective as a deterrent than jailing the individuals involved. From what I understand, the banking industry is built almost entirely on a Rand'ian "every man for himself" ethos, with little attachment to the company involved. I don't see how you can then hope to incentivize these individuals by fining the company. Except if the suits were quick enough that most of them were still at UBS, to feel the consequences. But that's not desirable either.
    - Vinnl 8y ago
      I wonder if that's the case. I think the source of the problem is people prioritising the short term over the long term, and I'm not sure whether potential jail time in the long run will deter you when your direct environment is pushing you another way. Instead, if the company risks fines like these, the environment of its employees may start to emphasise derisking more, to prevent them from being hit with new fines. Of course, this is all just me looking into my crystal ball.
  - robocat 8y ago
    One NZ price that is just in the news is 4.7MM NZD. https://i.stuff.co.nz/national/politics/110753822/is-a-life-worth-47-million https://i.stuff.co.nz/national/politics/110753822/is-a-life-...
- misiti3780 8y ago
  i just meant it was a slap on the wrist because everyone signs a DPA and no one goes to jail
missedthecue 8y ago
HSBC allegedly laundered (not revenue, not profit, they laundered) $880 million. They were fined $1.9 billion. Not "fined about half"
- tc313 8y ago
  I think he meant half of $4.2 billion.
  - misiti3780 8y ago
    indeed i did thanks
- onetimemanytime 8y ago
  They were fined on what they were caught, not on what they did. They seem to keep repeating such schemes time and time again. Unless execs are jailed, this is cost of doing business. At some point an exec either said, "let's do it," or closed his eyes and ears.
  - Loic 8y ago
    This time the fine was calculated based on the recovery rates from the French people retrieving their money back to France (the law changed drastically in France and to avoid jail time, many people brought back money from Switzerland). This gave the government statistics to evaluate the effective fraud and thus calculate the corresponding fine. Of course, over the years, we can be pretty sure that UBS made more money out of these schemes than the fine and they are most likely having such a scheme running right now which may be discovered in 10 years if we are lucky.
    - nraynaud 8y ago
      I like the idea: ”here is our best estimation, you can counter it by providing us with some documentation”
- Shaanie 8y ago
repomies68 8y ago
I think many would be happy to go to jail and keeo the billions instead.
- cbg0 8y ago
  You're very wrong. They can always make more money, but they can't make more time.
- usrusr 8y ago
  That might be true for people who would otherwise be desperately poor, but these are not.
kakwa_ 8y ago
The French hierarchy of UBS got some prison time, but it's 6 to 18 suspended prison sentences, so no real jail time. They were also fined 50000 to 300000 euros personally (they have to pay as private citizens, it's not part of the 3.7B euros fined to UBS). Not completely full, but also not completely empty.
- HenryBemis 8y ago
  50k and 300k are peanuts to these people, who have been pocketing millions each year in salaries and bonuses. Jail time would be the only real punishment. They take very calculated and rewarding risks. If they don't get caught they walk away with many millions. If they get caught they walk away with many millions minus a few k. Technically this is a "sure bet".
gadders 8y ago
Those bigger teller windows were appalling, but this was more the actions for a rogue branch/country network than an officially sanctioned policy from senior management. It does show a lack of controls in place, though.
- mcny 8y ago
  Senior management must be responsible for the actions of "rogue branch" in an official capacity. When you slip and fall on black ice, you don't sue the janitor.
Voloskaya 8y ago
This comments comes back on every single case like that no matter what the amount is, it's almost a cliché now. Sure prison would be nice, but 4.8 billion dollar is very far from "a slap on the wrist", it it more than half of their yearly operating income worldwide.
- misiti3780 8y ago
  It's not cliché, it's NOT ok that these corporations can commit huge crimes and no one goes to jail. I would say the fact that you seem OK with it is not OK. Literally no one went to jail for the crimes of 2007-2008. No one went to jail for laundering money for the cartels, no one went to jail for Libor scandal, and no one went to jail here. Yet if you walk into McDonalds and rob it of the amount in the cash register, you could go to jail for many years
- chrisbennet 8y ago
  It is not a deterrent though - they key doing it again and again. Right now employees aren’t punished (really) and the bank takes all the risk so why wouldn’t they do whatever they can get away with?

diogenescynic 8y ago

Moneyland is another good book on this subject.

AtHeartEngineer 8y ago

It was 4.2 billion not million, it probably should have been more, but that's definitely not a slap on the wrist.

branchless 8y ago
It's literally nothing to the top brass.
repsilat 8y ago
Right. For context, that's around 9% if their $48 billion market cap. Much worse than sending any one person to jail. Also: in the US, I've heard the "value of saving a life" for some decision calculations to be assumed at ten million dollars. That's $200k per year for 50 years. (In New Zealand, from talking to some civil engineers, it is a lot lower.) At the American price, the fine is worth 420 human lives.
- black_puppydog 8y ago
  I agree that this is more than a slap on the wrist, but I doubt that it's more effective as a deterrent than jailing the individuals involved. From what I understand, the banking industry is built almost entirely on a Rand'ian "every man for himself" ethos, with little attachment to the company involved. I don't see how you can then hope to incentivize these individuals by fining the company. Except if the suits were quick enough that most of them were still at UBS, to feel the consequences. But that's not desirable either.
  - Vinnl 8y ago
    I wonder if that's the case. I think the source of the problem is people prioritising the short term over the long term, and I'm not sure whether potential jail time in the long run will deter you when your direct environment is pushing you another way. Instead, if the company risks fines like these, the environment of its employees may start to emphasise derisking more, to prevent them from being hit with new fines. Of course, this is all just me looking into my crystal ball.
- robocat 8y ago
  One NZ price that is just in the news is 4.7MM NZD. https://i.stuff.co.nz/national/politics/110753822/is-a-life-worth-47-million https://i.stuff.co.nz/national/politics/110753822/is-a-life-...
misiti3780 8y ago
i just meant it was a slap on the wrist because everyone signs a DPA and no one goes to jail

missedthecue 8y ago

HSBC allegedly laundered (not revenue, not profit, they laundered) $880 million. They were fined $1.9 billion. Not "fined about half"

tc313 8y ago
I think he meant half of $4.2 billion.
- misiti3780 8y ago
  indeed i did thanks
onetimemanytime 8y ago
They were fined on what they were caught, not on what they did. They seem to keep repeating such schemes time and time again. Unless execs are jailed, this is cost of doing business. At some point an exec either said, "let's do it," or closed his eyes and ears.
- Loic 8y ago
  This time the fine was calculated based on the recovery rates from the French people retrieving their money back to France (the law changed drastically in France and to avoid jail time, many people brought back money from Switzerland). This gave the government statistics to evaluate the effective fraud and thus calculate the corresponding fine. Of course, over the years, we can be pretty sure that UBS made more money out of these schemes than the fine and they are most likely having such a scheme running right now which may be discovered in 10 years if we are lucky.
  - nraynaud 8y ago
    I like the idea: ”here is our best estimation, you can counter it by providing us with some documentation”
Shaanie 8y ago

repomies68 8y ago

I think many would be happy to go to jail and keeo the billions instead.

cbg0 8y ago
You're very wrong. They can always make more money, but they can't make more time.
usrusr 8y ago
That might be true for people who would otherwise be desperately poor, but these are not.

kakwa_ 8y ago

The French hierarchy of UBS got some prison time, but it's 6 to 18 suspended prison sentences, so no real jail time. They were also fined 50000 to 300000 euros personally (they have to pay as private citizens, it's not part of the 3.7B euros fined to UBS). Not completely full, but also not completely empty.

HenryBemis 8y ago
50k and 300k are peanuts to these people, who have been pocketing millions each year in salaries and bonuses. Jail time would be the only real punishment. They take very calculated and rewarding risks. If they don't get caught they walk away with many millions. If they get caught they walk away with many millions minus a few k. Technically this is a "sure bet".

gadders 8y ago

Those bigger teller windows were appalling, but this was more the actions for a rogue branch/country network than an officially sanctioned policy from senior management. It does show a lack of controls in place, though.

mcny 8y ago
Senior management must be responsible for the actions of "rogue branch" in an official capacity. When you slip and fall on black ice, you don't sue the janitor.

Voloskaya 8y ago

This comments comes back on every single case like that no matter what the amount is, it's almost a cliché now. Sure prison would be nice, but 4.8 billion dollar is very far from "a slap on the wrist", it it more than half of their yearly operating income worldwide.

misiti3780 8y ago
It's not cliché, it's NOT ok that these corporations can commit huge crimes and no one goes to jail. I would say the fact that you seem OK with it is not OK. Literally no one went to jail for the crimes of 2007-2008. No one went to jail for laundering money for the cartels, no one went to jail for Libor scandal, and no one went to jail here. Yet if you walk into McDonalds and rob it of the amount in the cash register, you could go to jail for many years
chrisbennet 8y ago
It is not a deterrent though - they key doing it again and again. Right now employees aren’t punished (really) and the bank takes all the risk so why wouldn’t they do whatever they can get away with?