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Outrageous HSBC Settlement Proves the Drug War is a Joke

539 points by phaer 13y ago

stefantalpalaru 13y ago
It actually proves that the rule of law is a joke.
brohee 13y ago
Not sure that mixing asset forfeiture laws and non-prosecution of industrial scale money launderers make for a clear argument... But the rich escaping with a slap on the wrist where the poor gets jail time is nothing new, if I was any more lefty I'd say it's paving the way for a hardcore revolution, but then it's been going on for decades, people are just too apathetic...
- koide 13y ago
  Saying it's nothing new is nothing new. Let's change that mentality! And revolutions usually take many generations to get to a boil. In these days given information flows a lot faster, it's going to take two or three instead of ten or fifteen generations. It's just like scientific ideas, they become mainstream when the status quo defenders who are mistaken die.
  - brohee 13y ago
    Thankfully people are more interested in Lindsay Lohan latest binge drinking bout than in how some get away with making billions of money laundering... No revolution is coming, at least as long as the people are entertained, and not too hungry.
    - deleted 13y ago
      [deleted]
    - koide 13y ago
      Oh, everyone's apathetic, so, why bother? You're part of the apathy. Not a great way to bring change. Nevertheless, as the rest of the world shows, there are people interested in change (see Kiev, Egypt, among others) Heck, even the Occupy movement showed there are people in the US itself worried about change. I wouldn't discount a massive revolution in our lifetime. It depends on how hard and how far politicians and oligarchs push, and on the other hand, on the appearance of appropriate leaders.
      - brohee 13y ago
        "It depends on how hard and how far politicians and oligarchs push" As long as they give scraps of the pie to enough people, nothing will happen. Lets get realistic, 99% of HN lectorate benefits from the status quo, me and likely you included...
TomGullen 13y ago
If you have enough money you're OK, you can always buy your freedom.
rms 13y ago
This news has been happening for a while. All the way back to the First Opium War. http://en.wikipedia.org/wiki/The_Hongkong_and_Shanghai_Banking_Corporation http://en.wikipedia.org/wiki/The_Hongkong_and_Shanghai_Banki... Sadly, many massive crimes against humanity go unpunished when commited by corporations. Compare the crimes of HSBC to the crimes of Pfizer. http://www.fbi.gov/boston/press-releases/2009/bs091509b.htm http://www.fbi.gov/boston/press-releases/2009/bs091509b.htm http://www.sfgate.com/business/article/Huge-penalty-in-drug-fraud-Pfizer-settles-2759293.php http://www.sfgate.com/business/article/Huge-penalty-in-drug-... The laws of the USA suggest that corporations that are convicted of two felonies are subject to a corporate death penalty, but given the continued non-punishment of perniciously malicious companies like HSBC and Pfizer, don't expect the US Department of Justice to act anytime soon.
- coldtea 13y ago
  >Sadly, many massive crimes against humanity go unpunished when commited by corporations. And/or first world countries.
  - rms 13y ago
    http://en.wikipedia.org/wiki/Turtles_all_the_way_down http://en.wikipedia.org/wiki/Turtles_all_the_way_down
    - coldtea 13y ago
      Sure, but: http://en.wikipedia.org/wiki/Diminishing_returns http://en.wikipedia.org/wiki/Diminishing_returns (E.g I don't care if some strict leader in an African village behaves badly to his people and gets away with it. Compared to what large powers do and get away with, with their world wars, invasions, opression, colonialism, etc, it's neglighible).
- seiji 13y ago
  US drug laws are actually just about keeping people who may vote for democrats out of the voting pool wrapped around a layer of public health stigma and "scary minorities terrorizing white people" images.
josefresco 13y ago
Let me summarize... 1. Doing illegal drugs: Not Ok, jail. 2. Making illegal drugs: Not ok, jail. 3. Selling illegal drugs: Not Ok, jail. 4. Making tons of money off of people who do sell illegal drugs: Partially Ok (just pay a small fine).
perlpimp 13y ago
I am just wondering why did Dread Pirate Roberts go to jain and Lanny Breuer did not. Both were facilitators of Illegal narcotics trade, except what HSBC did was orders of magnitude larger scale than that of what Silkroad did. One can argue that the people were removed from knowing exact nature of all transactions but trust me this won't float - you either recklessly incompetent or insidiously corrupt and involved in what is happening, especially when it happens on this scale. regardless, war on drugs is more or less like prohibition - way to control the masses without loosing face in front of elderly conservative public - who votes.
- brohee 13y ago
  How many hits did Lanny Breuer order? Even if I kinda like the idea of Silk Road, I can't help but think DPR will get what he deserved...
bradleyjg 13y ago
This article seems to be from last year. The AUSA in question is now back at white shoe law firm Covington & Burling, doing white collar criminal defense work. One hand washes the other.
beloch 13y ago
I certainly hope somebody is keeping an eye on Lanny Breuer's bank accounts; All of them, including the hidden offshore ones. I smell a big fat bribe.
- __alexs 13y ago
  Given that he's run off to collect a pay check in a new position created for him at Covington & Burling LLP, a firm well known for representing various major banks, I imagine they'll be getting plenty of work from HSBC in the future.
benmmurphy 13y ago
I'm outraged that the US is able to control the Mexican operations of a UK bank.
- jzwinck 13y ago
  If it makes you feel any better, it's sort of not a UK bank (Hongkong and Shanghai Banking Corporation). It's only fairly recently that the company repatriated itself.
- sz4kerto 13y ago
  ... of a bank who is present in the US. That how it works - last time a big US software company got a huge fine by the EU for monopolistic behavior. :)
  - randomdata 13y ago
    I'm not sure that is a very good comparison. That big US software company was practicing monopolistic behaviour in the EU. If IE was only forced on Mexico-based customers, do you think it would have ever even come to trial in the first place (in the EU)?
deleted 13y ago
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anom9999 13y ago
The moment you push any kind of culture underground you automatically make it harder and more expensive to control. So the smarter move would be to legalise the less harmful drugs but create a safe, controlled environment for sale and usage. While some of the more conservative people out there might disagree with people taking drugs, the fact remains that people do want to get high and thus those people will always find way to do so. To me, it makes more sense not to turn those people into outlaws and instead concentrate your efforts on tackling those who turn to drugs for non-recreational reasons (eg resolving addiction and/or peoples dependency on stimulants for escapism. Those individuals usually have other real life issues and -wrongly- turn to drugs as their "fix"). This will never happen though because drugs are given such a bad connotation in the press as the roots of all evil. Not all drugs are equal; whose which are proven to be relatively harmless compared to tobacco or alcohol are given the ridiculous label of "gateway drugs" - as if anyone who smokes two puff of a joint will automatically end up on the streets shooting heroin. If we want people off the harder drugs then we have to teach kids that not all drugs are equally bad - and to do this we need governments to send a saner political message about their stance on drugs. From a personal perspective, I've done a few "magic mushrooms" at festivals in my younger years. They made me a little giddy but at no point did I rape, steal nor murder. In fact I was more pleasant company than when I've been drinking (and I'm not a rude drunk by any means). Yet since then, the UK government has made magic mushrooms illegal. It's just absurd to think that my previous actions, which were entirely harmless at the time, are now illegal. And when kids experiment (as many kids often do) they too will learn that government legislation is broken towards "softer" drugs. Which will make then re-evaluate their opinion about their governments stance on all drugs. So the government are really just wasting their own time and our public money by continuing on this charade that all recreational chemicals are evil. The most hypocritical thing of all though, is I bet a great many of those in power have smoked weed at some point when they were teenagers / young adults (as we saw in the UK with the amusing yet frustrating confessions a few years back where several politicians came forward and admitted to "smoking but not inhaling". sigh
- dobbsbob 13y ago
  Actually Clinton is allergic to smoke, and was well known on campus for making hash cookies which is why he said 'never inhaled' because he ate weed instead. Too bad he went on to throw countless people in prison for doing exactly what he used to do.
jzwinck 13y ago
Too big to fail is too big. Would it really be so bad if we simply outlawed companies exceeding a certain number of employees? HSBC recently had about a quarter of a million people, which is just insane. When things get that big, nobody fully understands what is going on anymore, even at a basic level, and it does become plausible that terrible actions are taken with literally no one to blame, either because nobody is sure where the blame lies, or because the would-be accusers are scared of the systemic risk (which these days is very real). I propose that twenty thousand people ought to be enough for any company. Having more, smaller firms will improve the job market for individuals, reduce the burden of mega-powerful interests in government acting against the population as a whole, and provide more genuine opportunities for real leadership to a greater number of people. A gradual phase-in could be used, say max 500K employees by 2020, 200K by 2025, 100K by 2030, 50K by 2035, and 20K by 2040. And no funny business: one person cannot have a controlling interest in companies whose employee counts exceed the limit in aggregate.
- btian 13y ago
  Not a good idea. Wal-mart has over a million employees, but is not too big to fail. Problem with the financial sector is that everything is inter-connected. Long Term Capital Management was deemed too big to fail, yet the number of employees was tiny.
  - jzwinck 13y ago
    Are you sure Wal-Mart isn't too big to fail? Do you live in a place where it is dominant? A lot of Americans do now live in such places, where Wal-Mart has out-businessed smaller shops. If your choices of where to shop are pretty much limited to Wal-Mart, Costco, and Home Depot, where does that leave you if one of them does something really bad? Do you think the US would be all right if all the Home Depots closed tomorrow? It would not be all right. Twenty years ago there was no such thing.
    - btian 13y ago
      I live in Boston, MA, and I have not shopped at a Wal-mart except when I was in China. I'm quite optimistic that other supermarkets will be able to fill its shoes if Wal-mart were to fail. Perhaps Wal-mart is not a good example. My point is that when a 25000 employee company in any other industry fails (size of Lehman Brothers when it failed), the ripple is much smaller, and therefore, capping the number of employees is not a good idea. I do agree, however, that TBTF is bad. No entity should be TBTF and hold the country hostage.
retube 13y ago
Ah Matt Taibbi... guaranteed unbiased reporting on banks. It's not clear whether any employees knew they were facilitating money laundering. What HSBC has been found guilty of (and what they are being fined for) is lacking sufficient controls to detect money laundering activity. This is quite different to wilfully and knowingly assiting money laundering for drug cartels. All sorts of businesses are part of the cash economy and pay in large amounts of cash on a daily and weekly basis. The worst critiscm you can level here is that a lowly-paid cashier was insufficiently trained to spot potentially dubious sources of cash that were being paid in. Actually reading the whole article... it's just sensationalist drivel. There is no claim compliance officers were laundering money. In fact a compliance officer goes no where near money. Bonus clawback is in reponse to weak controls, not becuase they were in the employ of drug cartels.
- makomk 13y ago
  If they weren't a bank it wouldn't matter - that's the point of the article. People have had their entire homes confiscated because one of their kids was drug dealing and they didn't realise, yet when banks assist drug dealers the Government doesn't even take all the money they made from doing so.
  - retube 13y ago
    > People have had their entire homes confiscated because one of their kids was drug dealing and they didn't realise yeah that's ridiculous, but that's the US legal system for you and nothing to do with the banks.
    - carbocation 13y ago
      I don't believe that your interlocutors are anti-bank per se, but instead they are raising concern about unequal treatment under the law. In this case, the banks are the benefactors and the individual, by comparison, would be the loser were he/she to encounter a similar situation.
      - 13y ago
flexie 13y ago
Lawyer here. Every time I have a new client I have to obtain picture ID, check their share registers etc. Doesn't matter that most of my clients are entrepreneurs, startups or venture funds. Doesn't matter that all their transactions go through banks that have already checked the transactions and the people involved once and that all transactions are ultimately registered in public registers such as the commerce register. If I were suspecting that a client's transaction was part of some tax evasion scheme, European Union law would require me to report it to the authorities (although it's not clear that these requirements are in themselves lawful). All this nonsense costs lots of time and money for me and ultimately for my clients. Meanwhile, it turns out that the scumbags who actually launder money, do it more or less out in the open and they are not even put to jail.
- midas007 13y ago
  This story underscores that anything goes if you get big enough.
- jzwinck 13y ago
  As an individual, all these "know your customer" and "anti-money laundering" laws are a massive drag. When I moved to the UK it was nearly impossible to open a personal account (despite already having secured the right to work from the government--which vetting is quite substantial). The bank wanted utility bills with my residential address, but clearly I needed a bank account to get a home and utilities. It took four visits to the bank branch to get this sorted, each time resulting in more excuses about how they couldn't help because of KYC, AML, and CYA. If they want to fight money laundering, fine, give me an account with a minimal cash flow limit or some other restrictions. But the modern regulatory regime has infected retail banking to such a degree that normal humans with good jobs can no longer open an account at all. Clearly professional criminals continue to work the system just fine, meanwhile.
  - slashdotaccount 13y ago
    That's why cryptocurrencies are so good. Nobody can deny you when creating an account or moving your money.
deleted 13y ago
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rayiner 13y ago
All the HSBC settlement proves is that prosecutors like cases where they have IRC transcripts of someone ordering hits. That's why drug cases are so popular compared to white collar cases. Its easy to prove that some guy had a ton of cocaine and that's all the law requires. Much harder to prove that someone intended to facilitate money laundering (especially in a county where its easy to get caught up in that accidentally). It is simply the nature of white collar crimes, where the illegality of conduct usually depends on what the person was thinking, that it will be prosecuted less strongly than other kinds of crimes. This is a feature, not a bug. Also, I love how people on here seem to think that only terrorists and cyberlibertarian money launderers deserve due process. E.g. Perlpimps comment that we should infer purely from circumstances intent that is either criminally negligent or affirmatively corrupt.
- amirmc 13y ago
  I think you missed the part where they chose not to indict HSBC and the reasons for doing so. There doesn't seem to be much ambiguity about the actual money-laundering. The linked NY Times post has more info. http://mobile.nytimes.com/blogs/dealbook/2012/12/10/hsbc-said-to-near-1-9-billion-settlement-over-money-laundering/ http://mobile.nytimes.com/blogs/dealbook/2012/12/10/hsbc-sai...
  - rayiner 13y ago
    So what? Convicting a corporation on federal charges can have an impact grossly disproportionate to the charge. The conviction of Arthur Andersen destroyed a $10 billion/year company, put tens of thousands of people out of work, cost the economy of Chicago immensely, all over the actions of a handful of partners at the firm. There are situations where convicting a corporation is appropriate, but in the HSBC case there was very little evidence that anyone actually intended to do anything wrong. The settlement was entirely the appropriate outcome in this case.
    - jkn 13y ago
      I don't understand your position on HSBC's guilt. There is plenty of evidence that they have intentionally weakened their AML program. When they rated Mexico with the lowest AML risk in contradiction to every indicator in the industry, they knew of the consequences. They knew it would facilitate money laundering (by definition), in one of the hottest drug trafficking region. Does it matter so much that their ultimate goal was to make money rather than launder money? Of course money laundering was not an end in itself. That's probably why "willfully fail to establish and maintain an effective AML program" was made a crime: to give legislation some teeth in precisely a case like this, no?
raverbashing 13y ago
So Who gets "the produce" from Mexico again? How does this get distributed in the US? Is the bigger profit in production or distribution? In which country is an exporter payed usually? (this is not a hard question) The bank is responsible, yes, but more responsible is who put the money in there. And who provided the money in exchange for a product.
salient 13y ago
How can it be constitutional to extract your DNA, and then make you pay for it? That doesn't make any sense to me. What's next? Making you pay for your own jail time? If they want to make you do all of that, then they should pay for it. It reminds me of this recent story: http://www.policestateusa.com/2013/woman-probed-cavity-searched-x-rayed-reenter-usa/ http://www.policestateusa.com/2013/woman-probed-cavity-searc...
- andy_ppp 13y ago
  The US government is telling you to go fuck yourself - that'll be $9bn dollars worth.
volume 13y ago
I wonder: While Tabibi says that's just several weeks worth to HSBC, then what would have been an appropriate amount without threatening the financial system? I see the logic of how unfair it is for no jail time for anyone at HSBC. Perhaps this is something that is highly unlikely or too steep a battle to fight. Maybe then, at least the settlement could have been more than the "record $1.92 billion settlement".
- jaynos 13y ago
  Banks have proven time and time again that fines are not going to stop them from doing illegal activity. If you throw a few execs in jail, well, people will start to think more about their future actions. The current system of bonuses for performance and minimal chance of a US investigation that leads to a fine, at most, encourage illegal/shady behavior. Throw in the risk of jail time and people will think twice before doing anything might be illegal. You'd also get a lot more whistleblowers trying to cover their asses.
  - volume 13y ago
    Ya, I just am not familiar enough with the issue to know if 1.92 billion was appropriate or not relative to the damage of any other wide scale settlement. How about the $200 billion tobacco settlement as a baseline? Were HSBC's damages 1% what was settled in the tobacco case in 1998? Disclaimer: I'm an outsider to the legal profession, so pardon me if it's a silly comparison.
lifeisstillgood 13y ago
They turned off the money laundering alarm systems for over 200 trillion (yes tr-illion) - much of it from mexico. Come on - prosecute this one. I remember an article about the new form of journalism at the end of the Rockefeller/Morgan era, where detailed and specific highlighting of the outrageous crimes brought about notable social change. Perhaps this is the first story of the new wave - I would like to think so because only corrupt banking can get money cleaned for criminals - and cryptolocker is just the first of a new wave of crime.
- scintill76 13y ago
  > Perhaps this is the first story of the new wave Did you see that it's from 2012? (unfortunately only really visible in "20121213" in the URL, and the dates on his links) I guess it's a slow wave, if any.
  - lifeisstillgood 13y ago
    aaargh - I thought this was a news site. I had simply assumed that this was yet another and different criminal activity by a bank. Whereas I had already gotten upset by this story a year ago.
    - scintill76 13y ago
      Haha, me too. I would think there should be "(2012)" in the title, but I don't know what the policy is for applying that.
- rcarrigan87 13y ago
  Here is the article I believe you're referring to. Really enjoyed it as well. The slant of Rolling Stone's "journalism" makes me worry though. Any article where while reading you get progressively more angry is most likely heavily one-sided. That's why you come to the comments section, to bring yourself back down to earth and realize these issues are complex and multifaceted and the answers (prosecute all!) aren't always that cut and dry. Would love to see a more balanced account of this HSBC scandal. http://www.bbc.co.uk/blogs/adamcurtis/posts/WHAT-THE-FLUCK http://www.bbc.co.uk/blogs/adamcurtis/posts/WHAT-THE-FLUCK
scrabble 13y ago
I think this is really where the current issue with the extremely wealthy lies. I don't have an issue with anyone accumulating wealth, but I do take issue with people who are able to use that wealth to circumvent the law and increase their wealth through illegal means. Maybe I should have become a banker instead of a software developer.
vasilipupkin 13y ago
I think the issue is, in order to actually prosecute specific individuals criminally, the government would have had to prove that they indeed intended to launder money, as opposed to say make it easier for Mexican factories to pay suppliers in the US. Criminal burden of proof is much higher than the one required for a civil prosecution. The fact that the bank very openly subverted the money laundering controls probably makes it HARDER to prosecute, not easier since they probably also had legal language describing all the legitimate reasons for doing so, etc.
datums 13y ago
the invisible stimulus package
RamiK 13y ago
There is a simple and very fitting solution to this problem: mandatory minimum sentences for white-collar crimes.
ye 13y ago
If I owned a newspaper, the front page would say "FEDS LEGALIZED MONEY LAUNDERING".
ivanca 13y ago
That ironic moment when you realize that the American government is an ally of the Mexican cartel (and by extension, its terrorism) when it suits them best.
tibbon 13y ago
5 weeks of income. Let's say that again, 5 weeks. Now, 1.9B isn't nothing, but for a company with this type of income, and a market cap of around £130B, and profits in the 10's of billions... it approaches it. Can you imagine an individual being arrested for this type of behavior, and in the end losing only 5 weeks of income with no jailtime? Too big to fail. Too big to arrest. Too big to shutdown. Congrats to the banking industry, you've won.
- dgesang 13y ago
  Now it's on us to bring them down ...
  - farinasa 13y ago
    Yeah we'll get right on that.
- Guvante 13y ago
  Bad comparison, you cannot compare their total income to the fine, you have to compare their estimated profits from the scheme to the fine. If they estimated they have made $1 billion from the scheme, doubling that is a little lenient, but not totally out of the question. Unfortunately it is impossible to judge the situation without all of the facts. Nearly anything sounds damning when you know that guilt is involved.
  - tibbon 13y ago
    But if I'm caught selling something illicit, my personal fine isn't based off a 2x multiplier of the potential profit. That type of basis only acts as a deterrent if they are caught for their actions at least 50% of the time. Otherwise, if a company could successfully do something like this 3 times, and only get caught once- then it is rational that they should do it more.
    - Guvante 13y ago
      I did say the fine was lient, 2x is awfully small. However comparing it to the total profits of the company is silly. Personal things are different, laws have an easier time sticking hard penalties to people. You can't throw a company in jail, for a number of reasons. And since it is hard to pin anybody for it, you have to go back to an "appropriate" fine.
chanux 13y ago
Is this something that happen often? http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214 http://www.rollingstone.com/politics/news/gangster-bankers-t...
skyraider 13y ago
Everyone here seems really eager to take the DOJ at face value. Wow. Quite a reversal. In order to get anywhere, the DOJ has to charge HSBC with willful violations. So of course the government alleges that the violations were willful. Everyone here seems perfectly willing to accept those accusations, and every allegation in the DPA, regardless of the level of evidence presented in court. The knee-jerk reaction here seems to be that if someone running a corporation is alleged to have a subpar compliance program, it's all part of a giant willful conspiracy. This DPA raises the interesting question of what constitutes sufficient AML/KYC compliance. Fine. It looks like HSBC had a subpar program, which is illegal, even though there aren't precisely defined standards for AML/KYC in terms of what's adequate at scale. But people here are still really eager to criminally prosecute people for failing to prevent money laundering. This is hugely different from knowingly helping drug cartels, which is what HSBC is being accused of in the media.
wprl 13y ago
The system is a fraud.
csomar 13y ago
Anyone here notice something? Big Banks launder money and get with it. While Big Tech companies get to lose their right to privacy and seems powerless against the NSA. And big tech companies actually have a much bigger market cap.
- fuqua 13y ago
  Here's the difference. The banks control something critical: the financial system. What's the critical system for the tech companies? The Internet. Tech companies don't control it, so they don't have as much leverage.
andy_ppp 13y ago
I was under the impression that being a director of a Ltd. company gave you limited liability from your company going bankrupt (i.e. they can't take your home if your company goes bankrupt) but that you were fully legally responsible for the actions of the company. The article is perfectly correct in it's arguments, the world sadly is not. I think that government have realised that constantly being corrupt and just telling people "Oh, don't be silly of course the system is good and fair! Our hand in the cookie jar is just us making sure the cookies are still there for you!" doesn't wash anymore. So instead of fixing it they are cracking down on Internet freedom; certainly here in the UK.
heymatty 13y ago
What's outrageous to me is the government has to pass laws to make sure the banks police their customers. It's non-sense. You should have the right to deposit money with no questions asked. Law enforcement shouldn't have to rely on the banks to disclose anything to them unless they come with a court order and ask specific questions. The laws are put a strain on day-to-day business for everyone and it's tiring.
at-fates-hands 13y ago
This actually par for the course. Pretty much any time you start climbing the ladder and going after businesses connected to governments, it gets pretty dodgy. If I remember correctly, the same thing happened when they busted Pablo Escobar. They infiltrated his banking operations and once the investigators found out there were high ranking officials both in Columbia and here taking kick backs, they shut the investigation down.
mkhalil 13y ago
I can understand the fears of the Justice Department on this one. Any financial instability gets us closer to a depression. Something this government does not want. Any dip in our economy and the government immediately starts bailing out banks and big business. Why? Well, last time their was a depression, there was great change in the government. Every day one could look forward to another episode in the battle between the President and the Supreme Court. Prohibition was repealed, as was inhibition, and bank holidays last all year. They have worked too hard and too long to get the public under such great control as it is today, and we would do the depression so much better than the 30's did. 'TALKIN' BOUT A REVOLUTION' my friends.
daphneokeefe 13y ago
All the laws, all the money spent enforcing them, lives ruined, and we still believe that the "war on drugs" can be won. There is a huge industry based on production and trade in banned substances. Anyone who wants one of those substances can find it easily, though at artificially high prices and questionable quality, and often by taking some personal risk. Maybe we should try another approach? This one clearly isn't working. Of course, arrayed against alternative approaches is a massive law enforcement enterprise with a lot to lose from ending this "war".
redwood 13y ago
Money = inertia. Money = power. Money = too big to fail. Money > all.
Mikeb85 13y ago
When you think about what HSBC actually did, you realize it really is a joke. Whining about banks is de rigueur nowadays, but what HSBC did is far less nefarious than it's being presented... Imagine if you faced fines or jailtime if a criminal simply used your product. Let's say I run a McDonalds, and a drug dealer buys a burger from me, then all of I sudden I helped them launder money? Because that's what 'laundering' money really is, simply the legitimizing of illegitimate funds. HSBC is simply being extorted by the US because somewhere along the line a criminal used a bank account (and of course HSBC is one of the most international of all banks, and operates in many countries where law enforcement is poor at best). If every business that ever aided a criminal, or ever did business with a criminal were prosecuted, there wouldn't be any businesses left. Plenty of you buy and sell bitcoins, imagine if you were prosecuted because your bitcoins where once used to buy drugs? How would you feel then? (and this is actually a fairly probable outcome) Admissions of guilt on HSBC's part? Doesn't mean they're guilty, only means they plead guilty to avoid worse prosecution/extortion... Edit - furthermore, I find it hilarious that people will rail against the NSA and American surveillance, yet call for the heads of HSBC execs for not spying on and policing their clients enough...
- skyraider 13y ago
  Yes, this is what happens when justice gets politicized by populist fury. It's extremely scary.
- jomtung 13y ago
  I agree with your example being a joke because McDonalds cheeseburgers cannot be traded for illicit services and goods as easily as laundered cash. They've admitted to systemic corruption and taken month of revenue in fines because of it simply because the DOJ is too lazy to actually fix the problem. This is a horrible stain on the record of the DOJ and is tantamount bribery disguised with legalese. Trying to sugar coat it doesn't change that fact.
  - Mikeb85 13y ago
    You don't get it. The whole point of laundering money is so the criminals can spend it on legitimate things, like cars, houses, and burgers (or tacos?). You don't launder money to buy more illegal things, you launder money to buy things legally. Edit - the easiest way to launder money is actually to run a legit business (like a restaurant), and create fake transactions that are settled in cash. And of course, business men will take that cash to the bank. Now how is the bank going to determine if that cash coming in is from a real business, a fake one, if it's drug money, etc...? Because plenty of real businesses, especially in places like Mexico, do most of their business in cash...
tsotha 13y ago
We should get rid of money laundering laws and go back to busting people for things like drug trafficking. I don't like laws that criminalize behavior based purely on intent - wire you cousin $9000 on two separate days and the government may decide you've committed a crime punishable by five years in jail. Based on what it thinks you were thinking.
- deleted 13y ago
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dmix 13y ago
Instead of abandoning money laundering laws, why not double down on and focus our surveillance-state telescopes at the Cayman Islands? or any other store of money on foreign islands? Monitor financial transactions and use their data-mining systems to associate accounts to people in tax-paying countries hiding assets! Sounds good to me. Then the FBI can spend less time foiling terrorism plots manufactured by the FBI [1], that are force-fed to incompetent poor people. Instead, catching serious criminals who are directly exploiting our financial system. [1] http://blog.independent.org/2013/12/14/fbi-successfully-foils-another-fbi-plot/ http://blog.independent.org/2013/12/14/fbi-successfully-foil...
rxever 13y ago
Why is this link being pushed down Hacker News front page if you compare it to this link Perl6: Unary Sort. Both posted 9 hours ago. One with 486 points, the other 55 points? Because the former did not receive many points in say last hour?

539 points by phaer 13y ago

It actually proves that the rule of law is a joke.

Not sure that mixing asset forfeiture laws and non-prosecution of industrial scale money launderers make for a clear argument... But the rich escaping with a slap on the wrist where the poor gets jail time is nothing new, if I was any more lefty I'd say it's paving the way for a hardcore revolution, but then it's been going on for decades, people are just too apathetic...

koide 13y ago
Saying it's nothing new is nothing new. Let's change that mentality! And revolutions usually take many generations to get to a boil. In these days given information flows a lot faster, it's going to take two or three instead of ten or fifteen generations. It's just like scientific ideas, they become mainstream when the status quo defenders who are mistaken die.
- brohee 13y ago
  Thankfully people are more interested in Lindsay Lohan latest binge drinking bout than in how some get away with making billions of money laundering... No revolution is coming, at least as long as the people are entertained, and not too hungry.
  - deleted 13y ago
    [deleted]
  - koide 13y ago
    Oh, everyone's apathetic, so, why bother? You're part of the apathy. Not a great way to bring change. Nevertheless, as the rest of the world shows, there are people interested in change (see Kiev, Egypt, among others) Heck, even the Occupy movement showed there are people in the US itself worried about change. I wouldn't discount a massive revolution in our lifetime. It depends on how hard and how far politicians and oligarchs push, and on the other hand, on the appearance of appropriate leaders.
    - brohee 13y ago
      "It depends on how hard and how far politicians and oligarchs push" As long as they give scraps of the pie to enough people, nothing will happen. Lets get realistic, 99% of HN lectorate benefits from the status quo, me and likely you included...

TomGullen 13y ago

If you have enough money you're OK, you can always buy your freedom.

rms 13y ago

This news has been happening for a while. All the way back to the First Opium War. http://en.wikipedia.org/wiki/The_Hongkong_and_Shanghai_Banking_Corporation http://en.wikipedia.org/wiki/The_Hongkong_and_Shanghai_Banki... Sadly, many massive crimes against humanity go unpunished when commited by corporations. Compare the crimes of HSBC to the crimes of Pfizer. http://www.fbi.gov/boston/press-releases/2009/bs091509b.htm http://www.fbi.gov/boston/press-releases/2009/bs091509b.htm http://www.sfgate.com/business/article/Huge-penalty-in-drug-fraud-Pfizer-settles-2759293.php http://www.sfgate.com/business/article/Huge-penalty-in-drug-... The laws of the USA suggest that corporations that are convicted of two felonies are subject to a corporate death penalty, but given the continued non-punishment of perniciously malicious companies like HSBC and Pfizer, don't expect the US Department of Justice to act anytime soon.

coldtea 13y ago
>Sadly, many massive crimes against humanity go unpunished when commited by corporations. And/or first world countries.
- rms 13y ago
  http://en.wikipedia.org/wiki/Turtles_all_the_way_down http://en.wikipedia.org/wiki/Turtles_all_the_way_down
  - coldtea 13y ago
    Sure, but: http://en.wikipedia.org/wiki/Diminishing_returns http://en.wikipedia.org/wiki/Diminishing_returns (E.g I don't care if some strict leader in an African village behaves badly to his people and gets away with it. Compared to what large powers do and get away with, with their world wars, invasions, opression, colonialism, etc, it's neglighible).
seiji 13y ago
US drug laws are actually just about keeping people who may vote for democrats out of the voting pool wrapped around a layer of public health stigma and "scary minorities terrorizing white people" images.

josefresco 13y ago

Let me summarize... 1. Doing illegal drugs: Not Ok, jail. 2. Making illegal drugs: Not ok, jail. 3. Selling illegal drugs: Not Ok, jail. 4. Making tons of money off of people who do sell illegal drugs: Partially Ok (just pay a small fine).

perlpimp 13y ago

I am just wondering why did Dread Pirate Roberts go to jain and Lanny Breuer did not. Both were facilitators of Illegal narcotics trade, except what HSBC did was orders of magnitude larger scale than that of what Silkroad did. One can argue that the people were removed from knowing exact nature of all transactions but trust me this won't float - you either recklessly incompetent or insidiously corrupt and involved in what is happening, especially when it happens on this scale. regardless, war on drugs is more or less like prohibition - way to control the masses without loosing face in front of elderly conservative public - who votes.

brohee 13y ago
How many hits did Lanny Breuer order? Even if I kinda like the idea of Silk Road, I can't help but think DPR will get what he deserved...

bradleyjg 13y ago

This article seems to be from last year. The AUSA in question is now back at white shoe law firm Covington & Burling, doing white collar criminal defense work. One hand washes the other.

beloch 13y ago

I certainly hope somebody is keeping an eye on Lanny Breuer's bank accounts; All of them, including the hidden offshore ones. I smell a big fat bribe.

__alexs 13y ago
Given that he's run off to collect a pay check in a new position created for him at Covington & Burling LLP, a firm well known for representing various major banks, I imagine they'll be getting plenty of work from HSBC in the future.

benmmurphy 13y ago

I'm outraged that the US is able to control the Mexican operations of a UK bank.

jzwinck 13y ago
If it makes you feel any better, it's sort of not a UK bank (Hongkong and Shanghai Banking Corporation). It's only fairly recently that the company repatriated itself.
sz4kerto 13y ago
... of a bank who is present in the US. That how it works - last time a big US software company got a huge fine by the EU for monopolistic behavior. :)
- randomdata 13y ago
  I'm not sure that is a very good comparison. That big US software company was practicing monopolistic behaviour in the EU. If IE was only forced on Mexico-based customers, do you think it would have ever even come to trial in the first place (in the EU)?

deleted 13y ago

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anom9999 13y ago

The moment you push any kind of culture underground you automatically make it harder and more expensive to control. So the smarter move would be to legalise the less harmful drugs but create a safe, controlled environment for sale and usage. While some of the more conservative people out there might disagree with people taking drugs, the fact remains that people do want to get high and thus those people will always find way to do so. To me, it makes more sense not to turn those people into outlaws and instead concentrate your efforts on tackling those who turn to drugs for non-recreational reasons (eg resolving addiction and/or peoples dependency on stimulants for escapism. Those individuals usually have other real life issues and -wrongly- turn to drugs as their "fix"). This will never happen though because drugs are given such a bad connotation in the press as the roots of all evil. Not all drugs are equal; whose which are proven to be relatively harmless compared to tobacco or alcohol are given the ridiculous label of "gateway drugs" - as if anyone who smokes two puff of a joint will automatically end up on the streets shooting heroin. If we want people off the harder drugs then we have to teach kids that not all drugs are equally bad - and to do this we need governments to send a saner political message about their stance on drugs. From a personal perspective, I've done a few "magic mushrooms" at festivals in my younger years. They made me a little giddy but at no point did I rape, steal nor murder. In fact I was more pleasant company than when I've been drinking (and I'm not a rude drunk by any means). Yet since then, the UK government has made magic mushrooms illegal. It's just absurd to think that my previous actions, which were entirely harmless at the time, are now illegal. And when kids experiment (as many kids often do) they too will learn that government legislation is broken towards "softer" drugs. Which will make then re-evaluate their opinion about their governments stance on all drugs. So the government are really just wasting their own time and our public money by continuing on this charade that all recreational chemicals are evil. The most hypocritical thing of all though, is I bet a great many of those in power have smoked weed at some point when they were teenagers / young adults (as we saw in the UK with the amusing yet frustrating confessions a few years back where several politicians came forward and admitted to "smoking but not inhaling". sigh

dobbsbob 13y ago
Actually Clinton is allergic to smoke, and was well known on campus for making hash cookies which is why he said 'never inhaled' because he ate weed instead. Too bad he went on to throw countless people in prison for doing exactly what he used to do.

jzwinck 13y ago

Too big to fail is too big. Would it really be so bad if we simply outlawed companies exceeding a certain number of employees? HSBC recently had about a quarter of a million people, which is just insane. When things get that big, nobody fully understands what is going on anymore, even at a basic level, and it does become plausible that terrible actions are taken with literally no one to blame, either because nobody is sure where the blame lies, or because the would-be accusers are scared of the systemic risk (which these days is very real). I propose that twenty thousand people ought to be enough for any company. Having more, smaller firms will improve the job market for individuals, reduce the burden of mega-powerful interests in government acting against the population as a whole, and provide more genuine opportunities for real leadership to a greater number of people. A gradual phase-in could be used, say max 500K employees by 2020, 200K by 2025, 100K by 2030, 50K by 2035, and 20K by 2040. And no funny business: one person cannot have a controlling interest in companies whose employee counts exceed the limit in aggregate.

btian 13y ago
Not a good idea. Wal-mart has over a million employees, but is not too big to fail. Problem with the financial sector is that everything is inter-connected. Long Term Capital Management was deemed too big to fail, yet the number of employees was tiny.
- jzwinck 13y ago
  Are you sure Wal-Mart isn't too big to fail? Do you live in a place where it is dominant? A lot of Americans do now live in such places, where Wal-Mart has out-businessed smaller shops. If your choices of where to shop are pretty much limited to Wal-Mart, Costco, and Home Depot, where does that leave you if one of them does something really bad? Do you think the US would be all right if all the Home Depots closed tomorrow? It would not be all right. Twenty years ago there was no such thing.
  - btian 13y ago
    I live in Boston, MA, and I have not shopped at a Wal-mart except when I was in China. I'm quite optimistic that other supermarkets will be able to fill its shoes if Wal-mart were to fail. Perhaps Wal-mart is not a good example. My point is that when a 25000 employee company in any other industry fails (size of Lehman Brothers when it failed), the ripple is much smaller, and therefore, capping the number of employees is not a good idea. I do agree, however, that TBTF is bad. No entity should be TBTF and hold the country hostage.

retube 13y ago

Ah Matt Taibbi... guaranteed unbiased reporting on banks. It's not clear whether any employees knew they were facilitating money laundering. What HSBC has been found guilty of (and what they are being fined for) is lacking sufficient controls to detect money laundering activity. This is quite different to wilfully and knowingly assiting money laundering for drug cartels. All sorts of businesses are part of the cash economy and pay in large amounts of cash on a daily and weekly basis. The worst critiscm you can level here is that a lowly-paid cashier was insufficiently trained to spot potentially dubious sources of cash that were being paid in. Actually reading the whole article... it's just sensationalist drivel. There is no claim compliance officers were laundering money. In fact a compliance officer goes no where near money. Bonus clawback is in reponse to weak controls, not becuase they were in the employ of drug cartels.

makomk 13y ago
If they weren't a bank it wouldn't matter - that's the point of the article. People have had their entire homes confiscated because one of their kids was drug dealing and they didn't realise, yet when banks assist drug dealers the Government doesn't even take all the money they made from doing so.
- retube 13y ago
  > People have had their entire homes confiscated because one of their kids was drug dealing and they didn't realise yeah that's ridiculous, but that's the US legal system for you and nothing to do with the banks.
  - carbocation 13y ago
    I don't believe that your interlocutors are anti-bank per se, but instead they are raising concern about unequal treatment under the law. In this case, the banks are the benefactors and the individual, by comparison, would be the loser were he/she to encounter a similar situation.
    - 13y ago

flexie 13y ago

Lawyer here. Every time I have a new client I have to obtain picture ID, check their share registers etc. Doesn't matter that most of my clients are entrepreneurs, startups or venture funds. Doesn't matter that all their transactions go through banks that have already checked the transactions and the people involved once and that all transactions are ultimately registered in public registers such as the commerce register. If I were suspecting that a client's transaction was part of some tax evasion scheme, European Union law would require me to report it to the authorities (although it's not clear that these requirements are in themselves lawful). All this nonsense costs lots of time and money for me and ultimately for my clients. Meanwhile, it turns out that the scumbags who actually launder money, do it more or less out in the open and they are not even put to jail.

midas007 13y ago
This story underscores that anything goes if you get big enough.
jzwinck 13y ago
As an individual, all these "know your customer" and "anti-money laundering" laws are a massive drag. When I moved to the UK it was nearly impossible to open a personal account (despite already having secured the right to work from the government--which vetting is quite substantial). The bank wanted utility bills with my residential address, but clearly I needed a bank account to get a home and utilities. It took four visits to the bank branch to get this sorted, each time resulting in more excuses about how they couldn't help because of KYC, AML, and CYA. If they want to fight money laundering, fine, give me an account with a minimal cash flow limit or some other restrictions. But the modern regulatory regime has infected retail banking to such a degree that normal humans with good jobs can no longer open an account at all. Clearly professional criminals continue to work the system just fine, meanwhile.
- slashdotaccount 13y ago
  That's why cryptocurrencies are so good. Nobody can deny you when creating an account or moving your money.

deleted 13y ago

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rayiner 13y ago

All the HSBC settlement proves is that prosecutors like cases where they have IRC transcripts of someone ordering hits. That's why drug cases are so popular compared to white collar cases. Its easy to prove that some guy had a ton of cocaine and that's all the law requires. Much harder to prove that someone intended to facilitate money laundering (especially in a county where its easy to get caught up in that accidentally). It is simply the nature of white collar crimes, where the illegality of conduct usually depends on what the person was thinking, that it will be prosecuted less strongly than other kinds of crimes. This is a feature, not a bug. Also, I love how people on here seem to think that only terrorists and cyberlibertarian money launderers deserve due process. E.g. Perlpimps comment that we should infer purely from circumstances intent that is either criminally negligent or affirmatively corrupt.

amirmc 13y ago
I think you missed the part where they chose not to indict HSBC and the reasons for doing so. There doesn't seem to be much ambiguity about the actual money-laundering. The linked NY Times post has more info. http://mobile.nytimes.com/blogs/dealbook/2012/12/10/hsbc-said-to-near-1-9-billion-settlement-over-money-laundering/ http://mobile.nytimes.com/blogs/dealbook/2012/12/10/hsbc-sai...
- rayiner 13y ago
  So what? Convicting a corporation on federal charges can have an impact grossly disproportionate to the charge. The conviction of Arthur Andersen destroyed a $10 billion/year company, put tens of thousands of people out of work, cost the economy of Chicago immensely, all over the actions of a handful of partners at the firm. There are situations where convicting a corporation is appropriate, but in the HSBC case there was very little evidence that anyone actually intended to do anything wrong. The settlement was entirely the appropriate outcome in this case.
  - jkn 13y ago
    I don't understand your position on HSBC's guilt. There is plenty of evidence that they have intentionally weakened their AML program. When they rated Mexico with the lowest AML risk in contradiction to every indicator in the industry, they knew of the consequences. They knew it would facilitate money laundering (by definition), in one of the hottest drug trafficking region. Does it matter so much that their ultimate goal was to make money rather than launder money? Of course money laundering was not an end in itself. That's probably why "willfully fail to establish and maintain an effective AML program" was made a crime: to give legislation some teeth in precisely a case like this, no?

raverbashing 13y ago

So Who gets "the produce" from Mexico again? How does this get distributed in the US? Is the bigger profit in production or distribution? In which country is an exporter payed usually? (this is not a hard question) The bank is responsible, yes, but more responsible is who put the money in there. And who provided the money in exchange for a product.

salient 13y ago

How can it be constitutional to extract your DNA, and then make you pay for it? That doesn't make any sense to me. What's next? Making you pay for your own jail time? If they want to make you do all of that, then they should pay for it. It reminds me of this recent story: http://www.policestateusa.com/2013/woman-probed-cavity-searched-x-rayed-reenter-usa/ http://www.policestateusa.com/2013/woman-probed-cavity-searc...

andy_ppp 13y ago
The US government is telling you to go fuck yourself - that'll be $9bn dollars worth.

volume 13y ago

I wonder: While Tabibi says that's just several weeks worth to HSBC, then what would have been an appropriate amount without threatening the financial system? I see the logic of how unfair it is for no jail time for anyone at HSBC. Perhaps this is something that is highly unlikely or too steep a battle to fight. Maybe then, at least the settlement could have been more than the "record $1.92 billion settlement".

jaynos 13y ago
Banks have proven time and time again that fines are not going to stop them from doing illegal activity. If you throw a few execs in jail, well, people will start to think more about their future actions. The current system of bonuses for performance and minimal chance of a US investigation that leads to a fine, at most, encourage illegal/shady behavior. Throw in the risk of jail time and people will think twice before doing anything might be illegal. You'd also get a lot more whistleblowers trying to cover their asses.
- volume 13y ago
  Ya, I just am not familiar enough with the issue to know if 1.92 billion was appropriate or not relative to the damage of any other wide scale settlement. How about the $200 billion tobacco settlement as a baseline? Were HSBC's damages 1% what was settled in the tobacco case in 1998? Disclaimer: I'm an outsider to the legal profession, so pardon me if it's a silly comparison.

lifeisstillgood 13y ago

They turned off the money laundering alarm systems for over 200 trillion (yes tr-illion) - much of it from mexico. Come on - prosecute this one. I remember an article about the new form of journalism at the end of the Rockefeller/Morgan era, where detailed and specific highlighting of the outrageous crimes brought about notable social change. Perhaps this is the first story of the new wave - I would like to think so because only corrupt banking can get money cleaned for criminals - and cryptolocker is just the first of a new wave of crime.

scintill76 13y ago
> Perhaps this is the first story of the new wave Did you see that it's from 2012? (unfortunately only really visible in "20121213" in the URL, and the dates on his links) I guess it's a slow wave, if any.
- lifeisstillgood 13y ago
  aaargh - I thought this was a news site. I had simply assumed that this was yet another and different criminal activity by a bank. Whereas I had already gotten upset by this story a year ago.
  - scintill76 13y ago
    Haha, me too. I would think there should be "(2012)" in the title, but I don't know what the policy is for applying that.
rcarrigan87 13y ago
Here is the article I believe you're referring to. Really enjoyed it as well. The slant of Rolling Stone's "journalism" makes me worry though. Any article where while reading you get progressively more angry is most likely heavily one-sided. That's why you come to the comments section, to bring yourself back down to earth and realize these issues are complex and multifaceted and the answers (prosecute all!) aren't always that cut and dry. Would love to see a more balanced account of this HSBC scandal. http://www.bbc.co.uk/blogs/adamcurtis/posts/WHAT-THE-FLUCK http://www.bbc.co.uk/blogs/adamcurtis/posts/WHAT-THE-FLUCK

scrabble 13y ago

I think this is really where the current issue with the extremely wealthy lies. I don't have an issue with anyone accumulating wealth, but I do take issue with people who are able to use that wealth to circumvent the law and increase their wealth through illegal means. Maybe I should have become a banker instead of a software developer.

vasilipupkin 13y ago

I think the issue is, in order to actually prosecute specific individuals criminally, the government would have had to prove that they indeed intended to launder money, as opposed to say make it easier for Mexican factories to pay suppliers in the US. Criminal burden of proof is much higher than the one required for a civil prosecution. The fact that the bank very openly subverted the money laundering controls probably makes it HARDER to prosecute, not easier since they probably also had legal language describing all the legitimate reasons for doing so, etc.

datums 13y ago

the invisible stimulus package

RamiK 13y ago

There is a simple and very fitting solution to this problem: mandatory minimum sentences for white-collar crimes.

ye 13y ago

If I owned a newspaper, the front page would say "FEDS LEGALIZED MONEY LAUNDERING".

ivanca 13y ago

That ironic moment when you realize that the American government is an ally of the Mexican cartel (and by extension, its terrorism) when it suits them best.

tibbon 13y ago

5 weeks of income. Let's say that again, 5 weeks. Now, 1.9B isn't nothing, but for a company with this type of income, and a market cap of around £130B, and profits in the 10's of billions... it approaches it. Can you imagine an individual being arrested for this type of behavior, and in the end losing only 5 weeks of income with no jailtime? Too big to fail. Too big to arrest. Too big to shutdown. Congrats to the banking industry, you've won.

dgesang 13y ago
Now it's on us to bring them down ...
- farinasa 13y ago
  Yeah we'll get right on that.
Guvante 13y ago
Bad comparison, you cannot compare their total income to the fine, you have to compare their estimated profits from the scheme to the fine. If they estimated they have made $1 billion from the scheme, doubling that is a little lenient, but not totally out of the question. Unfortunately it is impossible to judge the situation without all of the facts. Nearly anything sounds damning when you know that guilt is involved.
- tibbon 13y ago
  But if I'm caught selling something illicit, my personal fine isn't based off a 2x multiplier of the potential profit. That type of basis only acts as a deterrent if they are caught for their actions at least 50% of the time. Otherwise, if a company could successfully do something like this 3 times, and only get caught once- then it is rational that they should do it more.
  - Guvante 13y ago
    I did say the fine was lient, 2x is awfully small. However comparing it to the total profits of the company is silly. Personal things are different, laws have an easier time sticking hard penalties to people. You can't throw a company in jail, for a number of reasons. And since it is hard to pin anybody for it, you have to go back to an "appropriate" fine.

chanux 13y ago

Is this something that happen often? http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214 http://www.rollingstone.com/politics/news/gangster-bankers-t...

skyraider 13y ago

Everyone here seems really eager to take the DOJ at face value. Wow. Quite a reversal. In order to get anywhere, the DOJ has to charge HSBC with willful violations. So of course the government alleges that the violations were willful. Everyone here seems perfectly willing to accept those accusations, and every allegation in the DPA, regardless of the level of evidence presented in court. The knee-jerk reaction here seems to be that if someone running a corporation is alleged to have a subpar compliance program, it's all part of a giant willful conspiracy. This DPA raises the interesting question of what constitutes sufficient AML/KYC compliance. Fine. It looks like HSBC had a subpar program, which is illegal, even though there aren't precisely defined standards for AML/KYC in terms of what's adequate at scale. But people here are still really eager to criminally prosecute people for failing to prevent money laundering. This is hugely different from knowingly helping drug cartels, which is what HSBC is being accused of in the media.

wprl 13y ago

The system is a fraud.

csomar 13y ago

Anyone here notice something? Big Banks launder money and get with it. While Big Tech companies get to lose their right to privacy and seems powerless against the NSA. And big tech companies actually have a much bigger market cap.

fuqua 13y ago
Here's the difference. The banks control something critical: the financial system. What's the critical system for the tech companies? The Internet. Tech companies don't control it, so they don't have as much leverage.

andy_ppp 13y ago

I was under the impression that being a director of a Ltd. company gave you limited liability from your company going bankrupt (i.e. they can't take your home if your company goes bankrupt) but that you were fully legally responsible for the actions of the company. The article is perfectly correct in it's arguments, the world sadly is not. I think that government have realised that constantly being corrupt and just telling people "Oh, don't be silly of course the system is good and fair! Our hand in the cookie jar is just us making sure the cookies are still there for you!" doesn't wash anymore. So instead of fixing it they are cracking down on Internet freedom; certainly here in the UK.

heymatty 13y ago

What's outrageous to me is the government has to pass laws to make sure the banks police their customers. It's non-sense. You should have the right to deposit money with no questions asked. Law enforcement shouldn't have to rely on the banks to disclose anything to them unless they come with a court order and ask specific questions. The laws are put a strain on day-to-day business for everyone and it's tiring.

at-fates-hands 13y ago

This actually par for the course. Pretty much any time you start climbing the ladder and going after businesses connected to governments, it gets pretty dodgy. If I remember correctly, the same thing happened when they busted Pablo Escobar. They infiltrated his banking operations and once the investigators found out there were high ranking officials both in Columbia and here taking kick backs, they shut the investigation down.

mkhalil 13y ago

I can understand the fears of the Justice Department on this one. Any financial instability gets us closer to a depression. Something this government does not want. Any dip in our economy and the government immediately starts bailing out banks and big business. Why? Well, last time their was a depression, there was great change in the government. Every day one could look forward to another episode in the battle between the President and the Supreme Court. Prohibition was repealed, as was inhibition, and bank holidays last all year. They have worked too hard and too long to get the public under such great control as it is today, and we would do the depression so much better than the 30's did. 'TALKIN' BOUT A REVOLUTION' my friends.

daphneokeefe 13y ago

All the laws, all the money spent enforcing them, lives ruined, and we still believe that the "war on drugs" can be won. There is a huge industry based on production and trade in banned substances. Anyone who wants one of those substances can find it easily, though at artificially high prices and questionable quality, and often by taking some personal risk. Maybe we should try another approach? This one clearly isn't working. Of course, arrayed against alternative approaches is a massive law enforcement enterprise with a lot to lose from ending this "war".

redwood 13y ago

Money = inertia. Money = power. Money = too big to fail. Money > all.

Mikeb85 13y ago

When you think about what HSBC actually did, you realize it really is a joke. Whining about banks is de rigueur nowadays, but what HSBC did is far less nefarious than it's being presented... Imagine if you faced fines or jailtime if a criminal simply used your product. Let's say I run a McDonalds, and a drug dealer buys a burger from me, then all of I sudden I helped them launder money? Because that's what 'laundering' money really is, simply the legitimizing of illegitimate funds. HSBC is simply being extorted by the US because somewhere along the line a criminal used a bank account (and of course HSBC is one of the most international of all banks, and operates in many countries where law enforcement is poor at best). If every business that ever aided a criminal, or ever did business with a criminal were prosecuted, there wouldn't be any businesses left. Plenty of you buy and sell bitcoins, imagine if you were prosecuted because your bitcoins where once used to buy drugs? How would you feel then? (and this is actually a fairly probable outcome) Admissions of guilt on HSBC's part? Doesn't mean they're guilty, only means they plead guilty to avoid worse prosecution/extortion... Edit - furthermore, I find it hilarious that people will rail against the NSA and American surveillance, yet call for the heads of HSBC execs for not spying on and policing their clients enough...

skyraider 13y ago
Yes, this is what happens when justice gets politicized by populist fury. It's extremely scary.
jomtung 13y ago
I agree with your example being a joke because McDonalds cheeseburgers cannot be traded for illicit services and goods as easily as laundered cash. They've admitted to systemic corruption and taken month of revenue in fines because of it simply because the DOJ is too lazy to actually fix the problem. This is a horrible stain on the record of the DOJ and is tantamount bribery disguised with legalese. Trying to sugar coat it doesn't change that fact.
- Mikeb85 13y ago
  You don't get it. The whole point of laundering money is so the criminals can spend it on legitimate things, like cars, houses, and burgers (or tacos?). You don't launder money to buy more illegal things, you launder money to buy things legally. Edit - the easiest way to launder money is actually to run a legit business (like a restaurant), and create fake transactions that are settled in cash. And of course, business men will take that cash to the bank. Now how is the bank going to determine if that cash coming in is from a real business, a fake one, if it's drug money, etc...? Because plenty of real businesses, especially in places like Mexico, do most of their business in cash...

tsotha 13y ago

We should get rid of money laundering laws and go back to busting people for things like drug trafficking. I don't like laws that criminalize behavior based purely on intent - wire you cousin $9000 on two separate days and the government may decide you've committed a crime punishable by five years in jail. Based on what it thinks you were thinking.

deleted 13y ago
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dmix 13y ago

Instead of abandoning money laundering laws, why not double down on and focus our surveillance-state telescopes at the Cayman Islands? or any other store of money on foreign islands? Monitor financial transactions and use their data-mining systems to associate accounts to people in tax-paying countries hiding assets! Sounds good to me. Then the FBI can spend less time foiling terrorism plots manufactured by the FBI [1], that are force-fed to incompetent poor people. Instead, catching serious criminals who are directly exploiting our financial system. [1] http://blog.independent.org/2013/12/14/fbi-successfully-foils-another-fbi-plot/ http://blog.independent.org/2013/12/14/fbi-successfully-foil...

rxever 13y ago

Why is this link being pushed down Hacker News front page if you compare it to this link Perl6: Unary Sort. Both posted 9 hours ago. One with 486 points, the other 55 points? Because the former did not receive many points in say last hour?