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I think https://en.wikipedia.org/wiki/HSBC#Money_laundering https://en.wikipedia.org/wiki/HSBC#Money_laundering might be more interesting to a hacker. As I've

I think https://en.wikipedia.org/wiki/HSBC#Money_laundering https://en.wikipedia.org/wiki/HSBC#Money_laundering might be more interesting to a hacker. As I've discussed previously[1], Taibbi is not noted for being a reliable systems expert on the international banking system. The simple facts are damning enough without layers of editorializing cruft from an unreliable source. For example, consider the assertion that people need to go to jail for fraud in the HSBC case. Most of these bad things are instances of the bank systemically not monitoring transactions closely enough. You can't pick individuals and throw them in jail for responding to bad institutional incentives--you have to pick out a specific criminal act that's punishable by jail time and pin it on someone, beyond reasonable doubt. Truth be told, if you start doing this in an equitable fashion with the goal of "punishing" bad banking behavior, you'll target a lot of lower-middle-class mortgage brokers from the 2008 mortgage crisis who knowingly committed fraud, which seems like an undesirable result. Or maybe you could pick a few politically convenient scapegoats, but that would be unjust in a different way. That's why we fine banks billions of dollars instead. [1] https://news.ycombinator.com/item?id=5616805 https://news.ycombinator.com/item?id=5616805

criley2 13y ago
For the life of me, I don't understand why the biggest investors and executives, who are rich because "with great risk of captial comes great opportunity for success". So they get the 99% of the profit, they get the big paychecks, because they took the big risk in the beginning. But on the flip side, they don't accept the risk for the behavior of their company. I don't understand how the system operates whereby they accept all the profit from their risk, but successfully mitigate almost all of the negatives of their risk, reducing jail time and criminal penalties to fines and loss of investment. If a man earns profit from an investment in his control, to me, he also is responsible for the legality and behavior of that investment. This seems obvious: Take down the executives. And keep on doing it, keep throwing them in jail until banks hire executives who don't let this bullshit happens. How many millionaires in jail would it take to change the culture? I'm betting not many.
- nostromo 13y ago
  That sounds nice, but it's impossible for an executive of a multinational bank to know what every employee is doing at all times. It's not like their quarterly business review slides include, "committed fraud to increase revenue 20%."
  - criley2 13y ago
    Quite frankly, I don't care. They as executives are trusted to handle every dollar, every share. They are the stewards leading their company, making the decisions, creating the profit or loss. When they succeed, they take the praise and the reward. When they fail... it's too hard for them to manage everyone? What? The buck stops there. It must stop there. It is THEIR PROBLEM to control the misbehavior of those who they entrust with their capital, not OUR problem. Those that Executives entrust with their assets are the Executive's responsibility. As a citizen, I don't get to say "Your accountant is immoral, fire him". I don't get to have a say in the ethics of private sector employees. I don't get to speak to who an executive entrusts with capital. I'm not responsible for their actions by design. So with that isolation of the private sector comes the responsibility of the private sector to handle it's own shit. Buck stops with the executive. I imagine the richest people alive, if they can "solve" the problem of <1ms trades cross-Atlantic, they can "solve" the problem of unethical behavior. What I think: they don't want to solve it. Why would they, unless we forced them? If they don't have control over their assets and those that manage it, why do they get the profit from what they do not control and do not risk? Either they accept responsibility for their assets and those that manage it... or the public should get the credit and profit from an asset the public is forced to manage and protect.
    - cynicalkane 13y ago
      This sounds like an easy way to make sure nobody wants to be an executive of a major bank. Why would anyone want to take charge of an organization where the actions of any one of hundreds, thousands, hundreds of thousands of employees can get them thrown in jail? Do you have the ability to monitor that? Or anyone you know? Would you bet your freedom on it? Do you want bank executives to be the sort of people who play the odds on going to jail vs. getting money? The smartest people in the world have trouble getting your friend feed to display ads you want to see. The smartest people in the world cannot get their 1ms trades--to use your example--to succeed more than 50+epsilon percent of the time. They don't have this genius power to monitor all fraud that you think they should have. And before you argue that banks don't even try to set up monitoring systems, they actually do. Every major bank now is into big data and machine learning precisely to stop employees and customers from breaking the law. (They are hiring, by the way.) This is in response to Congressional and popular pressure. In summary, I cannot think of a single significant way in which you understand what you're talking about.
bradleyjg 13y ago
> Truth be told, if you start doing this in an equitable fashion with the goal of "punishing" bad banking behavior, you'll target a lot of lower-middle-class mortgage brokers from the 2008 mortgage crisis who knowingly committed fraud, which seems like an undesirable result. I think it a very desirable result. When it came time to break up the mafia, the prosecutors didn't say "we can't get the dons right off the bet, oh well let's not bother". Getting the triggermen is both a good in itself and a strategy to both starve the organization of foot soldiers and to work up the hierarchy. No one seems to have any compunctions about putting outright lower class street drug dealers in prison. Specicially with respect to HSBC, there were several avenues available for criminal prosecution of individuals both low level (i.e. the actual tellers and bank branch officials who recieved the ilicit funds) and high level. Irene Dorner, President HSBC Bank USA, for example signed the 2010 consent decree with the Office of the Comptroller of the Currency[1] and could have been held in contempt of court for refusing to carry out the agreed changes. Also conspiracy and RICO don't require every member of the corrupt organization to be aware of all the details of the criminal acts imputed to the entire conspiracy. The Justice Department had no problem securing a prison sentence for money laundering against Vladimir Kats[2] as well as lower level employees of Liberty Reserve, but I bet he didn't go to Oxford. Can't a women that looks and sounds like Dame Judi Dench in prison, that would be uncivilized! [1]http://www.occ.gov/news-issuances/news-releases/2010/nr-occ-2010-121a.pdf http://www.occ.gov/news-issuances/news-releases/2010/nr-occ-... [2]http://www.informationweek.com/security/government/liberty-reserve-operator-pleads-guilty-t/240163490 http://www.informationweek.com/security/government/liberty-r...
- cynicalkane 13y ago
  Baffling. You can't even get a Mafia don for something his hit man did, unless you can prove the don was involved. RICO isn't a license to throw people in jail because of some hand-waving about responsibility. I don't think the law works how you think it works. When you talk about HSBC officers you're talking about things probably >90% of them didn't even intend to happen, much less had any provable connection to. Even actual bad guys are hard to put in jail, never mind if this stuff about blaming bank executives for everything has any significant merit. I'm double baffled that you think the mortgage officer example--the harried guy in a cheap suit overlooking some fudged numbers here and there--is at all comparable to a drug dealer or a hit man, both of whom knowingly destroy people for a living with their different weapons. Liberty Reserve is a poor counter-example because the Liberty Reserve guys allegedly laundered billions of dollars, on purpose, provably knowing they were doing it, in fact setting up an illegal business offshore so they could do it. If the allegations are true there's no doubt they are actual bad guys. Oh, and it took a two year long international effort to bring them down. And I remember there being some HN indignation when Liberty Reserve was taken down, which is ironic when you compare how angry people are about HSBC doing much less. Imagine the response if Liberty Reserve was owned by Goldman Sachs!
lhc- 13y ago
You can't cite your own post as evidence that Taibbi is not reliable. Taibbi is an accomplished journalist who is credible enough that he is routinely featured on radio and TV programs as a worthwhile guest to discuss financial systems and crimes. I'm not sure what part of that suggests he should not be trusted to have knowledge of international banking.

criley2 13y ago

For the life of me, I don't understand why the biggest investors and executives, who are rich because "with great risk of captial comes great opportunity for success". So they get the 99% of the profit, they get the big paychecks, because they took the big risk in the beginning. But on the flip side, they don't accept the risk for the behavior of their company. I don't understand how the system operates whereby they accept all the profit from their risk, but successfully mitigate almost all of the negatives of their risk, reducing jail time and criminal penalties to fines and loss of investment. If a man earns profit from an investment in his control, to me, he also is responsible for the legality and behavior of that investment. This seems obvious: Take down the executives. And keep on doing it, keep throwing them in jail until banks hire executives who don't let this bullshit happens. How many millionaires in jail would it take to change the culture? I'm betting not many.

nostromo 13y ago
That sounds nice, but it's impossible for an executive of a multinational bank to know what every employee is doing at all times. It's not like their quarterly business review slides include, "committed fraud to increase revenue 20%."
- criley2 13y ago
  Quite frankly, I don't care. They as executives are trusted to handle every dollar, every share. They are the stewards leading their company, making the decisions, creating the profit or loss. When they succeed, they take the praise and the reward. When they fail... it's too hard for them to manage everyone? What? The buck stops there. It must stop there. It is THEIR PROBLEM to control the misbehavior of those who they entrust with their capital, not OUR problem. Those that Executives entrust with their assets are the Executive's responsibility. As a citizen, I don't get to say "Your accountant is immoral, fire him". I don't get to have a say in the ethics of private sector employees. I don't get to speak to who an executive entrusts with capital. I'm not responsible for their actions by design. So with that isolation of the private sector comes the responsibility of the private sector to handle it's own shit. Buck stops with the executive. I imagine the richest people alive, if they can "solve" the problem of <1ms trades cross-Atlantic, they can "solve" the problem of unethical behavior. What I think: they don't want to solve it. Why would they, unless we forced them? If they don't have control over their assets and those that manage it, why do they get the profit from what they do not control and do not risk? Either they accept responsibility for their assets and those that manage it... or the public should get the credit and profit from an asset the public is forced to manage and protect.
  - cynicalkane 13y ago
    This sounds like an easy way to make sure nobody wants to be an executive of a major bank. Why would anyone want to take charge of an organization where the actions of any one of hundreds, thousands, hundreds of thousands of employees can get them thrown in jail? Do you have the ability to monitor that? Or anyone you know? Would you bet your freedom on it? Do you want bank executives to be the sort of people who play the odds on going to jail vs. getting money? The smartest people in the world have trouble getting your friend feed to display ads you want to see. The smartest people in the world cannot get their 1ms trades--to use your example--to succeed more than 50+epsilon percent of the time. They don't have this genius power to monitor all fraud that you think they should have. And before you argue that banks don't even try to set up monitoring systems, they actually do. Every major bank now is into big data and machine learning precisely to stop employees and customers from breaking the law. (They are hiring, by the way.) This is in response to Congressional and popular pressure. In summary, I cannot think of a single significant way in which you understand what you're talking about.

bradleyjg 13y ago

> Truth be told, if you start doing this in an equitable fashion with the goal of "punishing" bad banking behavior, you'll target a lot of lower-middle-class mortgage brokers from the 2008 mortgage crisis who knowingly committed fraud, which seems like an undesirable result. I think it a very desirable result. When it came time to break up the mafia, the prosecutors didn't say "we can't get the dons right off the bet, oh well let's not bother". Getting the triggermen is both a good in itself and a strategy to both starve the organization of foot soldiers and to work up the hierarchy. No one seems to have any compunctions about putting outright lower class street drug dealers in prison. Specicially with respect to HSBC, there were several avenues available for criminal prosecution of individuals both low level (i.e. the actual tellers and bank branch officials who recieved the ilicit funds) and high level. Irene Dorner, President HSBC Bank USA, for example signed the 2010 consent decree with the Office of the Comptroller of the Currency[1] and could have been held in contempt of court for refusing to carry out the agreed changes. Also conspiracy and RICO don't require every member of the corrupt organization to be aware of all the details of the criminal acts imputed to the entire conspiracy. The Justice Department had no problem securing a prison sentence for money laundering against Vladimir Kats[2] as well as lower level employees of Liberty Reserve, but I bet he didn't go to Oxford. Can't a women that looks and sounds like Dame Judi Dench in prison, that would be uncivilized! [1]http://www.occ.gov/news-issuances/news-releases/2010/nr-occ-2010-121a.pdf http://www.occ.gov/news-issuances/news-releases/2010/nr-occ-... [2]http://www.informationweek.com/security/government/liberty-reserve-operator-pleads-guilty-t/240163490 http://www.informationweek.com/security/government/liberty-r...

cynicalkane 13y ago
Baffling. You can't even get a Mafia don for something his hit man did, unless you can prove the don was involved. RICO isn't a license to throw people in jail because of some hand-waving about responsibility. I don't think the law works how you think it works. When you talk about HSBC officers you're talking about things probably >90% of them didn't even intend to happen, much less had any provable connection to. Even actual bad guys are hard to put in jail, never mind if this stuff about blaming bank executives for everything has any significant merit. I'm double baffled that you think the mortgage officer example--the harried guy in a cheap suit overlooking some fudged numbers here and there--is at all comparable to a drug dealer or a hit man, both of whom knowingly destroy people for a living with their different weapons. Liberty Reserve is a poor counter-example because the Liberty Reserve guys allegedly laundered billions of dollars, on purpose, provably knowing they were doing it, in fact setting up an illegal business offshore so they could do it. If the allegations are true there's no doubt they are actual bad guys. Oh, and it took a two year long international effort to bring them down. And I remember there being some HN indignation when Liberty Reserve was taken down, which is ironic when you compare how angry people are about HSBC doing much less. Imagine the response if Liberty Reserve was owned by Goldman Sachs!

lhc- 13y ago

You can't cite your own post as evidence that Taibbi is not reliable. Taibbi is an accomplished journalist who is credible enough that he is routinely featured on radio and TV programs as a worthwhile guest to discuss financial systems and crimes. I'm not sure what part of that suggests he should not be trusted to have knowledge of international banking.