HSBC to pay record $1.9B to settle US money-laundering case
Europe's biggest bank avoids criminal charges
- Duration 6:54
- Date Dec 11, 2012
Europe's biggest bank avoids criminal charges
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Thanks one well not one that worker from Europe's biggest bank HSBC will face a single criminal charge.
After prosecutors accuse it of failing to guard against terrorists tax cheats and drug cartels.
Instead it's agreed to pay a record one point nine billion dollar fine to settle the case.
Frankly that probably won't hurt this make it all just last quarter HSBC reported 2.5 billion dollars in net profits.
-- of the Department of the Treasury HSBC's failure to police transactions.
Allowed hundreds of millions of dollars in drug money from Mexican cartels to flow into the United States.
The Fed's report the bank also broke finance laws when he did business with -- Iran and Libya and Cuba and others.
Under HSBC's deal with the -- the bank will pay the record fine.
Change some of its policies but not one that bank employee will ever face criminal prosecution for this.
Prosecutors say say some just -- Department of Justice officials wanted to bring criminal charges but eventually decided not to not due to a lack of evidence.
But because it would put the future of one of the world's largest banks at risk.
Think of that not because they didn't have that the goods.
But because they were worried about the banking system the Fox Business Network Cheryl Casone is on -- with us.
This says clearly it seems to me as a matter of fact is that there's one set of rules for everybody and there's another set -- rules for the banks.
Depends I guess where you are incorporated.
This is a bank that is incorporated in Europe I think that's one of the -- In this investigation has been going on for months -- membership of the US senator over the summer the began to raise a lot of red flags about how HSBC.
Was doing business who they were doing business with you mention it Mexican cartels Iran Sudan Libya Cuba countries that we say.
Well frankly harbor terrorists now Fox Business reached out to HSBC.
What is your statement what do you say about this here's what they say.
This a spokesperson spokeswoman HSBC I would emphasize that this is not about certain individuals can HSBC is accountable for what -- Remedying -- and learning from that.
They have a new CEO they have new people in place they're gonna spend about 700 million dollars now to make sure that their controls.
Are in place says that excuse what they have done morally maybe not financially.
They say and the feds here in this country and the department justice say they are paying their -- As a spokesperson said this isn't about individuals.
The bank did not write that that -- memo.
Banks can't write memos the person had to do that -- the same vein the bank can't do deals with people that they know were fraudulent and criminal.
Only people can do that.
The government said they knew the goods they had the goods and decided not to go get out to get them right not because they didn't -- criminal activity they did.
But -- cause they were worried about the stability of this bank.
That couldn't happen for you Cheryl Casone.
That couldn't happen from any American banks and I really do believe that is one of the pieces of the puzzle is crucial to remember here we are reaching out right now to.
Legal experts judiciary experts in this country that can give us more clarity on why the feds did not take this case.
Any farther now you could also argue here.
If there's a failure to enforce rules there is criminal negligence.
There is the intent to commit a crime.
The all of -- our legal issues at least will on the show to answer those questions a from a financial perspective.
You have -- -- are reserved for the Department of Justice.
All -- and also up prosecutors here in New York going after them financially.
And deferring any type of criminal charges big chunk -- change.
In theory but -- one point nine billion dollars lot of chunk of change took a company like HSBC.
It is not to know the stock actually closed higher today in London.
Well Cheryl Casone thing up because of a lawyer when that when he is now handled money laundering cases.
Former federal prosecutor David Weinstein is with us he's currently a partner at the law for a law firm in Miami where he heads up -- white collar litigation practice nice to -- sir thank you.
You -- and good afternoon -- is there any other explanation for why you would not go after individuals except to say that there's a difference -- a rules for the big banks which must not fail.
Then there is for the average individual.
Unfortunately that's a message at the sending out -- I mean if you look at what happened in this huge amount of money that they're paying.
One point nine billion dollars dwarfs any of the other settlements.
And the only reason that this money passed through the bank.
This because of the individuals were working at the branch offices who met with the depositors.
When that money was flowing from Mexico.
Through the bank they had to know that that large an amount of money had to be coming from illegal activity.
The nation's that they were transacted with that are on the terrorist financing list.
They know that they shouldn't be doing business with those countries it's about the people but the people at the bank want to make sure that this bank stands up.
It remains in place and it's allowed to conduct business how do you do that.
You get a deferred prosecution agreement I tell all of my clients you need to have a plan in place it's all about compliance.
Look at what HSBC did they hired a former Department of Justice treasury official they're putting it compliance program in place all after the fact.
All treated differently because there were big corporate client.
Counselor if if -- -- in correct me if I'm oversimplifying here but if you had committed a crime.
And they came to you for a fine.
Would they for the good of your family in your children your wife and theoretically say we're not gonna go after you criminally.
Because we're worried about how your family's doing it seems to me in essence that's what they've done about this bank.
They wouldn't do that for the individual if you look at the individuals who prosecuted and money laundering conspiracies.
In drug trafficking and money laundering conspiracy anti terrorism financing.
He hit him with a criminal fines and penalties you put them in jail.
You tell them that they're sorry for their families -- bag with the court not to incarcerate them but you know what happens.
You spend some time in jail and should pay the fine the but you're not a corporate client you're an individual.
The money that they made above and beyond expenses.
The money that they made of profit was 2.5 billion dollars in the last quarter.
Is 600 million dollars less than that.
And the people who are sitting on this side of the aisle on this side of the of the of the border there.
And are seeing them what this corruption has done and what it's -- to this nation overtime were supposed to go all the made him pay one point nine billion -- goes to jail.
I can't imagine that too many Americans are very happy about this.
I don't think that they are I think the message that goes out to corporate America is.
Commit your crime and as one has put it it's better to.
Seek forgiveness and ask permission and that's exactly what they're doing they're seeking forgiveness after the fact.
Again if this was an individual they'd be sitting in front of a federal district court judge probably incarcerated.
Awaiting sentencing instead -- stocks up today David Weinstein prosecutors self David thank you.