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.