Search Results for: "money laundering"

Deutsche Bank ponies up $2.5B for cooking Libor; industry wide settlements approaching $9B.

The dubious distinction of drawing the largest fine for manipulating Libor goes to Deutsche Bank. Their total tab is now $3.5B. That leaves UBS in a distant second place at $1.6B.

Check out two articles on April 22:

Deutsche Bank will pay slightly over $2.5 billion to settle up for manipulating Libor, Eurbor, and Tibor (Tokyo interbank). Several specific Directors and VPs will be fired.

A subsidiary company in Britain will plead guilty to violating American criminal laws.

Bank fiascos – slow progress on changing cultures to prevent the next fiasco

Change in massive organizations is slow. Here are a few articles on the speed of compliance to prevent future fiascos.

4/1 – Wall Street Journal – HSBC Monitor Says Bank’s Compliance Progress Too Slow and 4/1 – Deal Book at NY Times HSBC Is Deemed Slow to Carry Out Changes – Quarterly report from the monitor on the 2012 DPA says he thinks the bank is not making enough progress on improving the anti-money laundering program. HSBC is now in year three of a five-year DPA.

On the other hand, progress takes time…

4/2 – This is Money at Daily Mail – Senior HSBC executive privately admits another major regulatory breach is ‘cast-iron certainty’, according to reports – This report got lots of coverage. I think it was reported elsewhere earlier than this article.

A senior compliance officer reportedly said that there is a high probability of another major regulatory violation at some point in the future. Several commenters and one headline I saw spun this as meaning the bank intends to break the law again.

Commerzbank joins the billion-dollar-fine club

The newest member of the elite club of banks that write billion dollar checks to settle up with the regulators is Commerzbank AG, the second largest bank in Germany.

After reading several reports on the billion and a half settlement, it seems to me that their corporate culture, at the core personality level, is to be not overly concerned about complying with US law.

The two primary issues are aiding and abetting the billion-dollar Olympus fraud and processing a quarter billion dollars of wire transfers for Iranian and Syrian customers banned from the US banking system.

HSBC helped assorted bad guys hide their money

Not much new reporting in the last week or so on HSBC. There has been a huge amount of political blowback in Europe, especially England. I’m not going into that turmoil.

Irony alert: last article I’ll mention suggests that money laundering may now be illegal in Switzerland, land of the numbered bank account.

Here is the last of the major Guardian articles:

2/12 – The Guardian – HSBC files: Swiss bank hid money for suspected criminals – Part 5. Depressing read.

Alleged crooks HSBC dealt with: …

HSBC: One of the ATMs available to tax evaders

Major breaking news this weekend is the extent of shady dealings at HSBC’s subsidiary in Switzerland. Lots of dirty money accepted for deposit at the bank and lots of assistance provided to money launderers and tax evaders.

HSBC says they have cleaned up their act since 2008.

2/8 – The Guardian – HSBC files show how Swiss bank helped clients dodge taxes and hide millions – Part 1. Large volume of leaked files show a HSBC subsidiary in Switzerland actively helped clients evade taxes.

Digital currencies are radical change on the horizon for banking and credit cards. (Radical change #2)

There is radical change all around us and more on the way. I know that. My blind spot is figuring out how that will affect my audit firm.

(Cross-posted from my other blog, Outrun Change.)

Here’s one part of radical change I can see on the horizon:

1-24 – Wall Street Journal – Bitcoin and the Digital-Currency Revolution / For all bitcoin’s growing pains, it represents the future of money and global finance.For a brain stretcher on digital currency, check out the article. Focus is on Bitcoin, which is merely the starting point in a revolution of disintermediation.

Just like money funds disintermediated (that means cut out of the picture) bank deposits in the distant ‘80s, bitcoin and other yet-to-be-invented digital currencies will disintermediate a huge portion of the financial system.

Picture the long series of transactions when you buy a cup of coffee at the corner shop with your credit card (this is a long quote cited under fair use, oh, also to promote the book it is extracted from): …

More good stuff on banking fiascos

No massive publicity on the banking front, but there are ongoing issues in getting money laundering under control and the ongoing investigations of manipulating foreign exchange rates.

1/14 – Wall Street Journal – Forex Probe Finds New Signs of Potential Wrongdoing – Scope of the Forex fiasco and related U.S. Federal investigation is growing. Investigators have found new issues and that the manipulation of exchange rates may go beyond trading desks.

There is also a wider investigation running that I’ve seen mentioned: …

What is behind the record $56 billion in bank fines in 2014?

Here are a few possibilities for the record level of settlements for bank in ’14: Wrapping up the legacy issues from the financial crisis. Regulators are getting serious about pushing big banks to improve their operations. Or maybe regulators just want more money. Or maybe banks are getting worse at obeying the law.

Some articles for you to ponder:

12/30 – Wall Street Journal – For Banks, 2014 Was a Year of Big Penalties – Here’s my interpolation of the fines and legal costs for the largest banks, as presented in the article’s graph:

  • $  3B – 2009
  • $  3B – 2010
  • $23B – 2011
  • $44B – 2012
  • $46B – 2013
  • $65B – 2014

Ripple effects from banking fiascos – 2

Those big banking disasters won’t go away. Ripple effects keep showing up, this time from breaking money laundering rules.

A number of US soldiers wounded in terrorist attacks while in Iraq have sued a number of banks for their role in facilitating the money transfers to fund the attackers.

This ties in to the money laundering fiasco of banks allowing Iranian businesses, government, and individuals to access the U.S. banking system in spite of a U.S. ban on doing so. Some of my previous posts in this tag.

So you think tons of bankers should be in jail? Getting a jury to agree seems to be a problem.

Looks like it is really hard to prove individual culpability for conspiracy when a banker’s employer was aiding tax evasion. (I don’t use the word alleged in a sentence saying a bank committed a crime because UBS has already ‘fessed up and paid a $780,000,000 fine.)

11/4 – Wall Street journal – Acquittal in UBS Case Sets Back Tax Probe – A senior executive of UBS was on trial for allegedly helping Americans evade income taxes. The feds alleged that the banker ran a conspiracy to launder money and evade taxes, with said conspiracy involving cloak and dagger techniques to hide from authorities that the bank was knowingly and intentionally laundering money for its clients.

Didn’t turn out well for those who want to see a new federal penitentiary built to hold all the bankers who belong in jail.

Those horrid penalties on BNP Paribas. Are they just a cost of doing business?

Let’s look at the fines and penalties from a different perspective.

Perhaps the consequences are just a cost of doing business. Perhaps the bank got off easy.

Let’s look at the penalties:

  • $8,973B fine
  • Guilty pleas on one federal criminal count and two state criminal counts
  • 13 individual staff terminated
  • 12 month ban on dollar settlements for six departments

Looking closer…

Fine – public comments are it will not have any impact on the bank. …