banksters

If You Liked Too Big To Fail, You Will Love Too Big To Indict

this is your bank on regulationsDid you know that there is now such a thing as “too big to indict”? This generally refers to institutions that are so big and so central to the entire economy of the whole world that there is nothing anyone can do to punish criminal activity and specifically refers to HSBC, a multinational banking conglomerate that laundered money for Mexican drug cartels and conducted business on behalf Iran and Sudan in spite of international sanctions. My, that sounds fun!

Hal Scott, director of the Program on International Financial Systems at Harvard Law School [...] says to forget about indicting a bank: Banks don’t break the law, people do. And people aren’t too big to fail or too big to go to jail.

Not a single individual at HSBC has been charged with the very conduct the bank admits happened, Scott says. And unfortunately, he adds, that’s probably because it’s just a lot easier to nail a bank. Charging people with crimes means more trials, which requires more money, time and evidence.

“You can go into the bank and say, ‘Well, I think you did something wrong, and I’m thinking of indicting you, and you better pay a big fine,’ and, you know, they’ll agree to it,” says Scott. “It’s not their money.”

And that, he notes, is the perverse thing about the HSBC settlement: That $2 billion is coming from shareholders, not from the people who broke the law.

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Is it just us or is something completely wrong with this system? Can we get a bunch of our drinking buddies together, declare ourselves a “corporation,” launder money for Mexican drug cartels, and then pay a fine that comes out of OTHER PEOPLE’S POCKETS when we’re caught? Is that allowed? Because it seems like a better plan then just committing crimes as an individual. Might as well incorporate first, given that incorporation has so many advantages.

But the settlement averted an indictment, and authorities thought that was the best outcome for the economy. Some legal experts, like Duke Law professor James Cox, agree. He says it would have been a disaster if HSBC was charged with crimes.

“Indicting a large bank like HSBC would create a huge regulatory ripple — if not an embolism — around the world,” Cox says.

When a bank is convicted of a crime, it could lose its banking license, and certain pension plans may be required to pull out their funds, he adds. That could have hemorrhaged HSBC enough to make it shut down.

“Authorities” is another word for “the government,” which is supposed to be by the people and for the people, rather than “by the economy and for the economy.” Although here’s an idea: maybe if the American people incorporated and then formed a gigantic SuperPac to lobby on behalf of the middle class, “authorities” would start figuring out a way to prevent the existence of corporations that are SO BIG as to collapse the economy of the country and the entire world if they fail.

[NPR]

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About the author

Kris E. Benson writes about politics for Wonkette and is pursuing a doctorate in philosophy. This will come in handy for when they finally open that philosophy factory in the next town over. @Kris_E_Benson

View all articles by Kris E. Benson

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96 comments

  1. memzilla

    “Indicting a large bank like HSBC would create a huge regulatory ripple — if not an embolism — around the world,” Cox says.

    I missed the part about why this would be a bad thing. Wouldn't the Invisible Hand Of The Free Market simply push all teh munniez into honest non-indicted banks?

    Can someone explain this to me please? Mr. President? Mr. Attorney General? Fellow Wonkeratti? Bueller? Anyone?

    1. bikerlaureate

      Not nearly as much as converting the skyscrapers into prisons…

      which is what I think you were deliberately implying, subtly, at a frequency only small animals can hear.

    2. DustyBowlBlues

      To save valuable tax payer moneys you could just push them out the windows of the skyscrapers. I hear it's a tradition on Wall Street.

  2. DalePues

    When I travel overseas I have to sign a little form saying that I'm not carrying more than ten thousand dollars in cash. It warns me that I could forfeit all the money and face imprisonment. Doesn't seem fair does it?

    1. comrad_darkness

      Actually, you are allowed to carry all you want in and out of the country. You simply have to declare how much. For us ordinary poors, the form appears to say what you said.

    1. Beowoof

      Unless you're wealthy they don't want your shitty little account. They have closed their local branches in my area to focus on upscale banking customers. So I think you get the finger if you try to open an account for less than a million.

      1. memzilla

        Interestingly, HSBC stands for "Hong Kong & Shanghai Banking Corp.," and was founded in 1865.

        It connected the financial capital of China with its largest port city, thus connecting teh munniez with China's export-import trade.

        Of course, its founding and subsequent operations had nothing at all to do with consolidating and laundering profits from the British opium trade which kept thousands of Chinese in abject misery and helped to fund British colonial operations to oppress millions of natives in India and Africa.

        No, you must be thinking of some other bank.

  3. ProgressiveInga

    "…..get a bunch of our drinking buddies together, declare ourselves a “corporation,” launder money for Mexican drug cartels, and then pay a fine that comes out of OTHER PEOPLE’S POCKETS when we’re caught…"

    Link please?

  4. Naked_Bunny

    Goverment to HSBC: You need to pay billions in fines for your lawbreaking.

    HSBC to Government: Sure. Here, take a bunch of money from our investors.

    Investors to HSBC: Please take even more of our money! Hurry, our domme insists we be punctual!

  5. Naked_Bunny

    Why is it that giving the government billions in fines is just the cost of doing business while giving the government billions in increased taxes is the END OF CAPITALISM?

    1. HogeyeGrex

      If we just renamed the taxes to fines, all the riches would pay them without bitching, because they know they're damned well guilty of something.

  6. EatsBabyDingos

    Bank Lawbook: "The Statue of Frogs was designed, tadpoles, to prevent banks from ribbeting any of their ill-gotten gains, as they toad the money line during the recession, nearly seeing their bonuses croak at every turn."

    1. HouseOfTheBlueLights

      Yeah, I hear we need a new Treasury Secretary and SEC Chairman, so it's not like they couldn't get another job.

    2. Callyson

      They probably didn't want to pay out the millions in severance packages. Cheaper to keep them and all that.

      /assholes

  7. Mumbletypeg

    “Indicting a large bank like HSBC would create a huge regulatory ripple — if not an embolism — around the world,” Cox says.

    That sounds about as airtight as a video-capture of Muslims-behaving-badly that's so incriminating, why, we just *can't* even release it to the public — eh, Rep. Fleming?
    #provingyourpointFAIL

    1. FeloniousMonk

      Seems to be Robert Reich, who actually said

      Despite what the Supreme Court and Mitt Romney say, corporations aren't people. (I'll believe they are when Georgia and Texas start executing them.)

      Google will turn up a lorryload of protest signs and one asshat at Forbes that all leave Georgia out. The Forbes creature is attributing it to Reich a year later, so Reich may have re-used the line.

      (30 years of teaching have rendered me pathologically incapable of leaving questions unanswered.)

  8. Guppy

    All the job applications I've had to fill out ask if I've ever been convicted of a crime.

    None have ever asked if I've been employed by a company convicted of a crime.

    Moral: always make sure you're able to shift culpability to your employer.

  9. glasspusher

    A certain SO of mine works for a certain bank known by four initials beginning with 'H'. One of the SO's co-workers said it stands for "how simple becomes complicated". This SO of mine had to go to "Cultural Transformation Training" this week, despite the fact that this SO joined the bank about 3 years after this all went down. I am informed that not much of the senior management of this bank remains from these "good" old days. Probably got golden parachutes, the goat fuckers.

    1. memzilla

      [reposted from reply to glasspusher elsewhere]

      Interestingly, HSBC stands for "Hong Kong & Shanghai Banking Corp.," and was founded in 1865.

      It connected the financial capital of China with its largest port city, thus connecting teh munniez with China's export-import trade.

      Of course, its founding and subsequent operations had nothing at all to do with consolidating and laundering profits from the British opium trade which kept thousands of Chinese in abject misery and helped to fund British colonial operations to oppress millions of natives in India and Africa.

      No, you must be thinking of some other bank.

    1. Mumbletypeg

      Ha, ha:

      "If I squint particularly hard, I can make out the face of a killer. Isn't news brilliant?" /sarcasm

      He reminds me of Robbie Coltrane's "Fitz," scaled down. Grateful for your sharing this, weej.

  10. not that Dewey

    Prosecutor: "Why did you launder money for Mexican drug cartels and conduct business for Iran?"

    HSBC: "Because that's where the money is."

  11. docterry6973

    Press Release

    Docterry, Inc., while denying that any miniature donkeys were harmed in any way, has agreed to pay this fine to put these allegations behind us. Or me.

  12. Chow Yun Flat

    But the settlement averted an indictment, and authorities thought that was the best outcome for the economy

    Amazing how what is best for the economy is never raising the living standards of the poor, increasing health and safety protection for workers or funding better public schools.

  13. lulzmonger

    Let the record show that LULZPac™ retroactively denies any connection whatsoever to the tragic lynching of an Indian CEO by his employees – as well as pre-emptively disavowing any knowledge or involvement in the "CLUE IN & BURN SOME SHIT DOWN, YOU FUCKING SLEEPWALKING SUICIDAL HUMAN CATTLE" billboards scheduled to premiere worldwide on January 3rd.

  14. Biel_ze_Bubba

    With billions in fines, I think the DOJ could well afford a criminal trial or three. In fact, why not make 'em pay for the trial as well?

    Sending these fuckers into retirement with tens of millions of dollars is not exactly creating a deterrent — you have to make this sort of shit not worth doing. New banking regulation: any executive convicted of a felony must forfeit all bonuses, from the date of the criminal activity. (GOPtards will howl about regulations interfering with the job creators, but fuck 'em.)

  15. Callyson

    Did you know that there is now such a thing as “too big to indict”?

    Then, how about we stop letting the banks get that big in the first place?

    /FFS

  16. Mahousu

    Charging people with crimes means more trials, which requires more money, time and evidence.

    Yeah, I hate doing my job, too.

  17. ttommyunger

    Corporations are people, my friend. People who can cheat, steal, bribe and defraud to the tune of Billions of Dollars with no fear of criminal prosecution or punishment of any kind. They are people with no Citizenship, hence no national loyalties to hinder their actions. They are people whose Charter requires profit, nothing less, nothing more. In other words, compared to those people, human beings are simply prey items.

  18. GeneralLerong

    These financial parasites are only one part of the money teat that our legislators suck.

    The opposite side to the coin are the old white conservatives who are so frightened of The Poors [apparently always envisioned as having brown skins] that they shovel money into the NRA so that they'll have all the assault weapons they need to defend their domiciles from Night of the Living Dead Poors.

    So we have the contemptuous 1% who have no reason whatsoever to fear any effort to humiliate or tax or fine or imprison them, and the 27% hysterically paranoid about defending themselves from the brown-skinned. And a Congress and legislatures who are afraid of both groups.

    I'd stay it's time to press and wring the 1% like a soggy cheese, and start dumping buckets of blood on NRA supporters to drive the point home that they're responsible for our appalling number of unnecessary gun deaths.

    Apparently a big hypodermic full of fake blood will shoot a good twenty feet. Hmmmm…

  19. Pithaughn

    Attention Poly Sci graduates: What is the difference between the US government and fascism? I only took two semesters of Political Science ( not sure if I'm supposed to capitalize that but it looks right ), but this sure looks like fascism to me. I cannot see a clear division between government officials and corporations in this country.

  20. mull_man

    You know, RICO is more than the surname of a Caribbean island. And I had thought that DoJ had stopped hiring nitwits from Liberty Law.

  21. richmx2

    In theory, the shareholders ARE the bank, so the shareholders SHOULD pay the fines. It's unfortunate that the American legal system recognizes "corporations" are (fictional) persons, rather than, as in the law here where I live (Mexico… one of the major victims of HSBC wrongdoing) the physical persons (the living, breathing human beings) who accept responsibility for managing the fiction person are also responsible for criminal acts done by the fictional person. Its rare, but managers are jailed for corporate wrongdoing.. I'm hoping the government of Mexico sues HSBC and its shareholders for the wrongful deaths of 60,000 of the nation's citizens. HSBC shareholders were part of a criminal enterprise, and they should pay for it one way or another.

  22. Tommmcatt_Again

    Here's an idea: instead of prosecuting the bank, why not prosecute the bank leadership that made the decisions? WIN-WIN!

  23. DustyBowlBlues

    Anyone seen "Arbitrage"? Do.

    And with this, I and my awesome mother, Xian self (see the good news post–not the Good News, you stupid shits. I'm not creepy Xian) to bed. As I expected, ending my day with the wonket is the best part of the day.

  24. Negropolis

    London is no better than New York on this, with the difference being that very few people are paying attention to the shit that passes as "banking" in London.

    Honestly, it's time to reimpose the seperation between investment and commercial in the United States, and bring it to pass in the other major banking nations.

    From the BBC, in September of last year:

    The Independent Commission on Banking is expected to recommend that the government should legislate almost immediately for big banks to put a ring fence or firewall around their retail banking operations – but the implementation of the ring fence, to separate retail banks from investment banks, should then be phased in over a period of years.

    I hope they do it more quickly, and that America can quickly reimpliment Glass-Steagall.

  25. Negropolis

    “Authorities” is another word for “the government,” which is supposed to be by the people and for the people, rather than “by the economy and for the economy.”

    It's not even by and for the general economy, because banks have found a way to win regardless of the situation. It's a government for and by the financial institutions. I wish this was about the economy, because maybe then the banks would feel more shame in fucking over 99% of the people.

  26. DahBoner

    Does anyone else have the sneaking suspicion Democracy has been corrupted by corporations for their benefit?

Comments are closed.