Banks being sued, no jail time for criminals

In other words, lower level employees will get suffer, customers will have higher fees, but I bet the top executives don't suffer at all.


Victims will get some of their money back, which is justice.
But if the perpetrators are not personally punished, there will be no deterrent effet.

http://abcnews.go.com/Blotter/hsbc-pay-record-19-billion-settle-money-laundering/story?id=17934134#.UMkn6ayDoeI


By BRIAN ROSS (@brianross) , MATTHEW MOSK (@mattmosk) and CARLOS BOETTCHER
Dec. 11, 2012

Europe's largest bank will avoid a potentially crippling criminal prosecution for its role in moving cash for known terror groups, Mexican drug cartels, and rogue governments such as Iran, instead agreeing to pay a record $2 billion settlement, U.S. Justice Department officials announced at a press conference today.

Announcement of the immense fine was overshadowed Tuesday by efforts to explain why, in one of the clearest cases of criminal money laundering in recent memory, no one would be facing jail time. Criminal conviction on money laundering violations would have also forcibly prevented HSBC from doing business in the United States.

Lanny Breuer, Assistant Attorney General for the Criminal Division, disputed suggestions that the bank was "too big to be prosecuted," but did not dispute the idea that the Justice Department was looking for ways to penalize the bank without compromising the jobs and beneficial economic activity that the massive bank supports.

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Critics of the settlement said Tuesday that the government had missed a rare chance to send an unmistakable signal about the threat posed by financial institutions willing to assist drug lords and terror groups in moving their money.

"How much more do you need to know?," said Jack Blum, an international banking expert in Washington, D.C. "These people managed to cross virtually every line that was crossed. It was an astonishing amount of criminal behavior."

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The fine, while large, represents only a fraction of the bank's business -- in 2011 HSBC had net income of $16.8 billion. Markets responded to the settlement by sending HSBC's stock up. HSBC Holdings PLC's share price in London was trading 0.5 percent higher. Analysts said the bank will be able to absorb the cost of the settlements.

According to Shore Capital analyst Gary Greenwood, the penalties are equivalent to around 9 percent of each company's 2012 pretax profits.

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Page 2 of 2
Dec. 11, 2012

Some of the most egregious activities involved efforts by the bank to assist Mexican drug lords in moving the massive amounts of cash they were receiving through their criminal activity, giving the bank the reputation as the bank of choice for drug gangs, Lynch said.

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http://www.nytimes.com/2012/12/10/business/banks-face-a-huge-reckoning-in-the-mortgage-mess.html?_r=0

Mortgage Crisis Presents a New Reckoning to Banks

By JESSICA SILVER-GREENBERG
Published: December 9, 2012

The nation’s largest banks are facing a fresh torrent of lawsuits asserting that they sold shoddy mortgage securities that imploded during the financial crisis, potentially adding significantly to the tens of billions of dollars the banks have already paid to settle other cases.

Regulators, prosecutors, investors and insurers have filed dozens of new claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and others, related to more than $1 trillion worth of securities backed by residential mortgages.

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The banks are battling on three fronts: with prosecutors who accuse them of fraud, with regulators who claim that they duped investors into buying bad mortgage securities, and with investors seeking to force them to buy back the soured loans.

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