HSBC Too Big for Jail? – ponders ABC news reporter Brian Ross, as the HSBC money-laundering scandal deepens. And ABC news is not the only mainstream media publication throwing stones at Europe’s largest bank.
HSBC set aside $1.5 billion to cover fines since last month.
HSBC will pay a $1.9 billion U.S. fine in a money-laundering case that featured Mexico’s Sinaloa cartel and Colombia’s Norte del Valle cartel laundering $881 million through HSBC and a Mexican unit. What’s HSBC’s part, other than being a bank of choice of the villains? According to several media reports, the bank failed, and aknowledged it failed, to maintain an effective program against money laundering. The U.S. Justice Department was fast in taking measures, but is a $1.9 billion U.S. fine enough? It is, at least, a warning for other banks.
For HSBC, however, this is a PR nightmare of proportions, and yet, HSBC Holdings PLC (0005.HK) stocks were up +0.31% today, after the news, at 79.70HKD. This is, perhaps, because HSBC is still one of the strongest banks in the world, and handled the matter with panache, assuming its responsibility openly:
“We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes,” said HSBC Chief Executive Stuart Gulliver, cited by Reuters.
Reuters reported that HSBC also agreed to pay $665 million in civil penalties to regulators including to the Office of the Comptroller of the Currency, the Federal Reserve, and the Treasury Department.
A more in depth report on the matter is available via Reuters (linked in the quote above) or in the video at the end of the article. Right now, we move on the focus on Twitter reactions to the story. Obviously, many Twitter users are not happy with the issue, but this is not your usual Justin Bieber story to create more controversy than the obvious. The trend is clear: educated users, make educated comments:
US Treasury says HSBC “failed to help secure financial borders & left dangerous gaps that drug dealers & other criminals readily abused”
— Robert Peston (@Peston) December 11, 2012
HSBC execs get off w/ “trivial” fine in one of the clearest cases of criminal money laundering in recent memory dunn.it/T5Qmb0
— Greg Santos (@gregsantos) December 11, 2012
Is it time the people took back over yet? Let me know when it is time. reuters.com/article/2012/1…
— Phil Butler (@Philbo) December 11, 2012
Similar examples could go on. There are many tweets, enough to make HSBC a trend is several European countries, but nothing to truly raise eyebrows. Still, the matter makes waves internationally, featured as a top news story by Google, Bing and Yahoo!.
It’s a nightmare before Christmas, because like all nightmares before Christmas, all is well, when it ends well. The bank has nothing but $1.9 billion plus change to regret. Tomorrow? The media will focus on doomsday and other issues.
About Mihaela Lica Butler
