Another business that proves to be too big to fail. Or at least be prosecuted.
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British financial giant HSBC is being accused of assisting Mexican drug cartels and other countries subject to economic sanctions (Iran and Libya) with moving money through the U.S. The allegations have not been denied by HSBC, in fact, Irene Dorner (head of HSBC’s U.S. division) has previously admitted the company’s mistakes in a statement earlier this year.
The CEO of the U.S. division of HSBC is apologizing for lax controls that lawmakers say allowed Mexican drug cartels to launder billions of dollars through the U.S. operation for years.
Irene Dorner, president and CEO of HSBC Bank USA, said in testimony prepared for a hearing by the Senate Permanent Subcommittee on Investigations that “we deeply regret and apologize” for the lapses by HSBC.
Now the giant is being penalized by way of fine.
The U.S. Justice Department has responded by placing a $1.9 billion penalty on HSBC to resolve the money-laundering misconduct, in what they call a “heavy price.”
But the lack of criminal or legal action against HSBC is helping resurface the argument that such deals are insufficient punishment and that they promote white-collar crime.
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But reactions like this are built in big business. According to CBS:
In the 1990s and accelerating after a series of corporate scandals following the dot-com bust, U.S. government officials began deferring prosecution against big corporations in return for companies admitting wrongdoing, agreeing to pay monetary penalties, and promising to obey the law and other rules.
Hmmm. Interesting. With behavior Justice Department Assistant Attorney General Lanny Breuer calls “astonishing,” no HSBC executive will be held accountable for the “record of dysfunction” that the bank displayed.
All we can do is “SMH.”
SOURCE: CBS
