The idea that HSBC executives are guilty of... violating the article author's feelings about how anti-drug law should work, or something... is why you don't get your financial news from an unbalanced liar in Rolling Stone magazine. But even Taibbi can't seem to identify what precisely the executives are guilty of, an important prerequisite to prosecution in a nation governed by the rule of law.

As for the regulations, they are the reason why you can't open an account or move large amounts of money without giving the bank enough information to know a substantial portion of your entire financial history, and giving the bank permission to freeze your accounts approximately whenever they feel like it or whenever the government demands. You can think this is a good thing or a bad thing, but since you, Mr. Lawyer, complain about you having to burden yourself with the responsibility of knowing your client, surely you feel it's unfair that banks have to do the same thing? Not to mention the privacy implications.

1. Just to be clear, they didn't put the anti money laundering people who were literally in charge of verifying compliance with these laws in jail either, even though they knew they were laundering money for the drug cartels. The government alleged, and HSBC never denied, that they had actual knowledge of what the money was being used for. It's not a case of "oh, well, i had no idea bob at the teller window was doing this".

This isn't "the guys several layers down did something wrong"

This is "We knew were laundering money for the drug cartels. We intentionally flouted the law (government's words) to keep it that way."

2. It's not "wrong", it's criminal. What HSBC did is criminal. They were charged criminally. This is a deferred prosecution agreement. They knew they were laundering money for drug cartels. "But even Taibbi can't seem to identify what precisely the executives are guilty of, an important prerequisite to prosecution in a nation governed by the rule of law." This isn't even close to right. You should try reading the charging documents that led to this settlement. The prosecutors make very clear what they are guilty of, and lay out a case that makes clear the executives knew exactly what was going on. They even created fake banking products to get around the law, too.

If your choice, as a banker, was to piss off a government hell-bent on making you a scapegoat and risk going in front of a jury of poor people who hate bankers, charged of violating a law it's impossible not to violate, and which carries a 20 year jail sentence, you would agree to a deal as well.

The US allegations were ridiculous anyway. They claimed HSBC "knew" there was money laundering taking place merely because money was moving from Mexico to America. I'm sure HSBC execs, having read newspapers and watched TV, were quite confident there was drug money in that stream. This is quite different to knowing precise account numbers of drug cartels with a high degree of certainty. I don't recall the latter being alleged, however.

36. Between 2004 and 2007, HSBC Mexico exported over $3 billion U.S. dollars per year to the United States through Banknotes. In November 2007, Banco de Mexico, the central bank of Mexico, expressed concerns about the volume of U.S. dollars exported by HSBC Mexico back to the United States. Specifically, Banco de Mexico wanted an explanation as to why HSBC Mexico’s U.S. dollar exports were significantly larger than its market share would suggest.

37. In February 2008, HSBC Mexico’s CEO met with the head of the CNBV and the head of Mexico’s financial intelligence unit, Unidad de Inteligencia Financiera (“UIF”). Again, the volume of HSBC Mexico’s U.S. dollar exports was raised as a concern. Specifically, HSBC Mexico’s CEO was told that law enforcement in Mexico and the United States were seriously concerned that the U.S. dollars being deposited at HSBC Mexico might represent drug trafficking proceeds. HSBC Mexico’s CEO was also told that Mexican law enforcement possessed a recording of a Mexican drug lord saying that HSBC Mexico was the place to launder money.

http://www.justice.gov/opa/documents/hsbc/dpa-attachment-a.p...

If you read the DOJ's side of things, HSBC is guilty of things like "we said Mexico is high-risk, HSBC disagreed and so failed to automatically monitor a bunch of transactions," in more legalistic language.

http://www.justice.gov/opa/documents/hsbc/dpa-attachment-a.p...

You can't just link a law and say "it says somewhere here someone can go to prison for some reason, so I'm sure that bank executives should go to prison." The Wikipedia article's blurb about prison does not seem to cover HSBC's conduct, but it's also hopelessly vague.

The Bank Secrecy Act carries with it an enormous amount of different regulations and different laws and different penalties. The exact part is what you need to make your "point". If you can't produce it, no point has been made.

The DOJ hasn't bothered to produce any reason to throw executives in jail, and I bet you can't either. Blithe self-righteousness is not a reason. A vague reference to a multi-hundred-page set of laws and regulations is not a reason.

New York State Penal Law Sections 175.05 and 175.10

edit - 175.10, which HSBC have admitted guilt to, is a class E felony in NY, which apparently has sentencing guidelines of up to four years in prison with a minimum of one year.

It's not at all uncommon for prosecutors to say things like that and then not file charges because they know they can't get a conviction.

[1] http://compliance.saiglobal.com/community/news/item/4420-che...

They are very much at fault.

We don’t need to cross-reference anything. You should be disproving things. Why? Because HSBC admitted guilt and liability.

There's absolutely no parallel here to the situation of ordinary people. If you see that Joe Schmoe's bank account was used to launder money from a drug cartel, you can very reasonably infer that he intended to assist that cartel. There's no reasonable explanation that involves trying to save money or hassle on regulatory compliance issues. Those sorts of transactions don't just accidentally or incidentally happen to ordinary people.

I'm sure, however, that the US government can try to prosecute mid-level HSBC managers and maybe some random bank tellers in Jersey and Mexico and wherever. Somehow I doubt this is what the article author actually wants to happen.

They are not even doing that. And given your view that the executives should not get done because of mid level managers being responsible, what do you think of the fact that they are not being held to account either? Or do you honestly believe that this money was laundered through HSBC with nobody at HSBC helping?

Why not? You PAY him based on what that guy several layers down does...

And if you'd like to propose making it a crime, I'd encourage you to first think about how exactly it could be twisted - how to separate the really-morally-responsible the scapegoats, in advance, with nothing but legal language.

Strangely, libertarian hacker types tend not to come to their defense as quickly as they do bank executives.

I don't receive any cash payments and I don't make any cash payments in my business. I am not a financial institution. This year, the value of the transactions that I participated in was probably around 100 million euro or so, and a fraction of a percent of this went through my account or ended up on my account, and all of it came from and went to banks. Not a cent was received in cash. Not a cent was paid out in cash. Now, HSBC and other banks probably have billions flowing through their system every second and in the order of millions received in cash or paid out in cash every second. I think it's natural to burden a few thousand banks with these rules, and not millions of small businesses.

If one were to adopt the position that it is the responsibility of business to prevent fraud, well, you have a unique ability to do that that no other institution has. This is why I think your post is hypocrisy. Banks aren't lawyers, they don't know your clients like you do, and if you adopt the principle that "people should be responsible for the actions of their customers", you're going to have a significant amount of responsibility that nobody else can handle.

I was under the impression this is how it worked eg. that lawyers' only responsibility are to their client. Otherwise you would get some kind of weird conflict of interest in every case.

Well, it is the responsibility of HSBC to prevent criminal fraud by HSBC, which is one of the charges they plead guilty to in their plea bargain.

First , they are responsible as managers like others said.

But we're talking about serious allegations of supporting terrorism. For a common citizen , any strong link to terrorism means some extra legal horrible torture . But for HSBC's managers , even repeated offenses and warnings mean nothing.

I'm not convinced that it wasn't completely obvious. The Mexico unit shipped $7 Billion to the US unit. Why did Breuer call it "stunning failures of oversight"?

> You don't send an executive to jail because a guy several layers down did something wrong

So why are the bonuses of those execs being cut if they are not to blame? Again, why did Breuer call it "stunning failures of oversight"?

I'm also not convinced they won't use this as a horrible excuse to unnecessarily increase monitoring, while the entire thing was plainly visible under an existing system. I would like cash to stay private, can i really not have that without something like this being invisible?

http://money.cnn.com/2012/12/10/news/companies/hsbc-money-la...

Then you should be able to seize that individuals assets and while you can't send a company to jail you can bankrupt it.

If we're going to consider all companies as people then all laws should be applied to said people.

No, in America (as everywhere else corporations exist, since this is the very definition of a corporation) a corporation is considered a legal person (that is, an entity subject to legal process in its own identity). In America, corporations have Tax ID numbers, which serve (for tax purposes, though not for Social Security itself) a purpose similar to Social Security numbers.

This is why the executives should be criminally chargeable. Banks are systemically important, but the executives are not.

There's a couple ways you could handle a "corporate death sentence" applied to a bank: 1. You could treat it as if the bank had failed completely -- all assets are forfeited, but customers receive refunds on insured (e.g., covered by FDIC) accounts only up to the amount insured. This would create some risk for large depositors, which could be considered bad, or could be considered good as it would encourage large depositors to take an active interest in how banks are run which would create pressure on behavior which would reduce the likelihood of needing to impose sanctions.

2. You could treat it as a facilitated sale of the corporation itself -- either in one unit or split into pieces with different buyers -- with any proceeds going to government rather than the shareholders.

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.

Also showing your current bank account statements will help.

But we'd rather refuse to open this simple checking account just because (...we're busy laundering money :-)...).

And no one gives you the exact goddamn reason or a simple solution.

Isn't it more fraudulent to give the bank home-made documents than to give them nothing? At least when you give then nothing you're being honest about what you're giving them.

As for me, I continue to print out bank statements on university printers and have everyone from embassies to landlords accept them.

No one I've met believes that going to your bank's website and printing out the PDF they give you is fraudulent.

Turns out he had just gone through the whole debacle himself. He had to show a bank statement, but he only has an online account. Went to the bank to get a statement printed and stamped, and whoever he went to turn it in to still refused it because it hadn't been mailed.

Personally, I don't want to give the BA any easy reason to reject my visa applications, I get all the mailed proof of address I can.

The fact that they are so easily manipulated is the reason they are most often not accepted as proof of identification, regardless of criminal law. It could be totally legal and it would be in the best interests of banks/businesses to not accept them due to possible liabilities.

So I feel pretty confident in recommending Lloyds in this case.

I think the case is that it's a rather non-deterministic process and the outcome depends a lot on exactly which manager you talk to and what their mood is like that day.

I think the easiest way to get a UK bank account as a foreign national is to be a student.

Its not like I turn up with with 50k in 500 euro bills and want to open an account that day.

I don't like this system when you need a bank account to get a home and utilities. Why can't you use cash? I don't like that the bank wanted your utility bills with your residential address just to create an account for you. What for? They want to control everything. I just don't like that.

First, if you have just move there, and don't have a bank account, you don't have checkbook either (there are countries who has no checks at all) - no check by mail.

No utilities accepted credit or debit card, they always wanted to have a proper bank account number from me. Later on they have improved their system and now they offer online bill pay, with an extra "convenience fee" for credit cards. Hurray! (Although I am not sure if the bank account is still a requirement for opening.)

Btw. similar story applies for wireless service: I was required to provide my full employment contract to receive a simple phone number (at that point I had bank account, active employment...). How weird is that?

The wireless thing is because the phone companies treat the account as a credit account. The easy way around it is some prepaid plan (which is possible to fund in cash...). 5 years ago it wasn't such a good option. These days a $50 prepaid plan is at least reasonable, even if it isn't the best option.

For cellular, prepaid seems to solve all of the problems everywhere I've been. I ordered a prepaid SIM card here in the US over the internet with nothing but a credit card number, has full data service and everything. Same thing everywhere else I've travelled in the last year.

Around the beginning of 2013, I took a trip to UAE, Norway, and the Netherlands. In each of those, I was able to get a prepaid SIM card at the airport for cash, with nothing but a passport for ID. All with phone, text, and data service.

I also knew someone who paid their phone bill in person every month because he was a teenager and didn't have a checking account, but had a cell phone bill.

When I set it up, it required a phone call to turn on, and my name, um, not sure what else. No bank account or anything else. Just a phone call with my name.

In practice this is mostly implemented by demanding the person pay cash at a post office.

You do not need a bank account to pay for utilities in the US. I'm not saying not having one will be very pleasant though.

I came to the conclusion that in the US, if you have everything that people usually have (SSN, bank account, credit card, residential address, phone number, car, drivers license), you will be treated well. Miss just one on list, and people will assume that something is wrong with you, and it probably triggers a few warning signs (e.g. in fraud detection systems).

It may be coming from the fact that homeless and criminal elements usually miss a few on the list, so it was considered an easy signal for such pre-filtering, however, moving from a different country has the same signals, triggering multiple false alarms.

You don't need an account.

(The distinction is important in the current political climate, since the excuse "it's EU law" is abused by politicians to steamroll the local electorate into believing they have no say in the matter, and pretend they can not be challenged locally. That's how we got screwed with for instance data retention "laws" that are blatantly unconstitutional in several EU member states.)

(b) Regardless, an EU Directive is essentially an "EU law". It's a distinction without much of a difference.

(c) Some countries' constitutions say "All EU law/directives/whatever are binding and constitutional, unless the country leaves the EU". The Irish constitution has this sort of clause.

(d) EU law/directives/regulation is created by the EU. Which we vote on. European Parliament elections are coming up in 2014. If you think you have no say in the EU, vote in the EP elections and vote in your national elections. Those 2 directly elected bodies control EU law.

Attorney-client-privilege is an English/American legal term with a lot of meanings to it shaped by the courts.

In the EU, different member states have rules regarding confidentiality between lawyers and clients. Usually, the right to confidentiality is not absolute (the lawyer may have an obligation to speak in certain situations).

For a while lawyers hoped that something like attorney-client-privilege could be interpreted into the European Convention for the Protection of Human Rights and Fundamental Freedoms. With the ruling above this seems less likely.

A lawyer most certainly does not have the duty to hide the crimes or confessions of his client(s). Not in the EU, not in the US (nor does a priest or doctor, but they can legally choose to do so in most jurisdictions. Anyone who is not a priest or doctor cannot make this choice : you have to report. In practice I've never seen anyone get sued for not reporting anything outside of financials).

Now as for the interpretation of this ... You have the US way (it's not illegal until a court says it is ... there's something to be said for that), and the EU way. The problem in the EU is that a lot of tax collection agencies are less than subtle and have legal rights that mean you simply don't want to even appear to cross them. In Western Europe, a tax agent has the right to shut down any business without specifying a reason, lock any account without specifying a reason, and take anything from any premise without a reason (or lock it down).

Does this violate the relevant constitutions ? Nobody's successfully challenged it as far as I know. (Yet another reason EU criticism of NSA data collection is ridiculously hypocritical).

That doesn't change the basic principle though. If you go to a lawyer saying "I killed this guy, get me out of it", he may go to the police and report you. While the lawyer is unlikely to get sued for not warning the police, when asked a lawyer MUST testify that this has indeed happened (same thing applies to anyone else for that matter).

Perhaps you could clarify how it costs both your clients money and you money as well?

I'm assuming you are billing your clients for the work that is necessarily in one way or another for having to do this. Or it's part of your overhead and you base your rates in part on your overhead.

For sure it's a pain but there are many things that need to be done in order to be in business. They are necessary evils like filing tax returns or collecting social security numbers and making employees fill out various government required employment forms. It's called "the cost of doing business". Little minor bs that isn't anywhere close to going away.

I'm asking because I work with lawyers in the EU from time to time and I've never had to provide ID etc. It was always a telephone call or email plus sometimes a retainer.