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General Category => Off the Record => Topic started by: Sheilbh on February 09, 2015, 11:45:26 AM

Title: HSBC leaks
Post by: Sheilbh on February 09, 2015, 11:45:26 AM
QuoteCatalogue of malpractice endorsed by bankers laid bare in HSBC files
Swiss operation actively abetted clients in keeping accounts secret from tax authorities, at its height hiding $120bn in assets

David Leigh, James Ball, Juliette Garside and David Pegg
Sunday 8 February 2015 21.00 GMT

The HSBC files, the biggest banking leak in history, reveal the full scale of malpractice at its Swiss subsidiary. Recent court cases in the US and Europe have provided individual examples of the bank's wrongdoing, but the leaked files show how these cases were part of a persistent pattern of misconduct.

In one case that illustrates the bank's conduct, a wealthy British client, Stoke City football club director Keith Humphreys, frankly told his HSBC manager that his father's $430,000 (£280,000) Swiss account was "not declared" to the UK tax authorities.

Humphreys, whose wealth originated from the sale of a local supermarket chain, explained that one HSBC manager had already advised how to extract undeclared offshore money via a credit card.

"The credit card is thus used to enable the Humphreys family to make withdrawals from 'cash points' when they are outside the UK," he said.

The banker, who even brought paperwork to Humphreys' stately home in Cheshire because the client was uneasy about "walking around with a set of account-opening documents", recorded how Humphreys was also alarmed to hear a Swiss lawyer might realise he had a secret HSBC account. "This situation initially appeared to cause some disquiet to my hosts, though this later gave way to a more relaxed attitude with the sentiment that Genevan lawyers would be discreet, something that I did nothing to discourage."


On clinching arrangements in London, the bank manager wrote: "We subsequently repaired to the Ritz, for a very enjoyable lunch." Humphreys told the Guardian his father eventually had to repay about $224,000 (£147,000) for evading tax due to the UK.

Another customer, retired accountant Andrew Sebastian, also told the Guardian how he had now been made to pay about $64,000 (£42,000) in back tax, interest and penalties. HSBC in Switzerland had supplied him with £50,000 in sterling banknotes in the course of a year.

At its height, HSBC's secretive Swiss arm hid a total of $120bn (£78bn) in assets. These funds were collected from wealthy clients all over the world and have already led to criminal investigations and charges against the bank in France, Belgium, the US and Argentina. But in Britain, no legal action has been taken against HSBC and the evidence against it has never been made public until now.

The leaked Swiss HSBC files implicate the bank in apparent misbehaviour all over the world. One Australia-based HSBC client planned to share his "black" account with his daughter in London.

The bank noted: "The account is 'undeclared', a fact with which [she] may not be entirely at ease – as a compliance officer at Kleinwort Benson." The manager wrote that the account was also not declared "to the best of my knowledge" to the tax authorities in Australia.


HSBC was so keen to protect its clients, that it used a codename when phoning another prominent Australian financier, Charles Goode, then chairman of the ANZ bank in Melbourne, about his US$318,000 deposit. According to the files, HSBC instructed he "would like to be called Mr Shaw". Goode told the Guardian the use of a codename was the bank's idea, not his, and the deposit had long been left dormant by him. He says he has paid all tax due on the account.

Another HSBC manager wrote on the file of Irish businessman John Cashell (later to be convicted of a tax fraud): "His preoccupation is with the risk of disclosure to the Irish authorities. Once again I endeavoured to reassure him that there is no risk of that happening."

HSBC similarly recorded on the file of a British property developer: "He is very much concerned that ... client information could be exchanged ... I explained him that we are bound to CH [Swiss] banking secrecy which is one of the strictest in the world."

HSBC appears to have allowed executives of a textile firm to conceal unregistered "bearer share" certificates in a Swiss safe, which would have revealed who really owned the company. Bearer shares are banned in some countries, because of their potential for abuse.

The bank recorded: "In this safe are some very important documents (bearer share(s) which belong to the beneficial owner Mr DL from Israel. These shares are kept in a safe for tax reasons."

In a separate transaction, the bankers themselves recorded that they were uneasy when a Serbian businessman wanted to deposit €20m (£15m). But they merely asked him to act less conspicuously.

HSBC "explained that as per today the bank did not interfere in his money transfer transactions but would have preferred to reduce those activities on a lower scale. [He] understands our concerns and will use smaller amounts".

The bankers seem to have been reluctant to take risks personally. The files record that a wealthy owner of a London furniture store and holder of a secret HSBC Swiss account, demanded HSBC "help him get back money into the UK on a 'non-declared' basis" by carrying in bundles of cash."

HSBC offered instead to provide him or a colleague with sterling banknotes in Switzerland, recording, "what he decided to do with friends of his ... was his affair". In a revealing remark, an HSBC manager wrote on the files: "We made clear the difference between passive and active action on our part."

This tax evader also ended up repaying UK authorities, as part of a $205m (£135m) haul Britain has so far recovered from HSBC's tax-dodging customers. Chris Meares, then overall head of HSBC private banking, assured the Treasury committee in 2008: "We prohibit our bankers from encouraging or being involved in tax evasion."

But former tax inspector Richard Brooks, author of The Great Tax Robbery, who is interviewed about HSBC on BBC Panorama on Monday night, says: "I think they were a tax avoidance and tax evasion service. I think that's what they were offering. They knew full well that people come to them to doge their tax liabilities. There are very few reasons to have an offshore bank account, apart from just saving tax."

The HSBC files are being published in an international collaboration including the French daily Le Monde in Paris, which first obtained the data; the Washington-based International Consortium of Investigative Journalists; and BBC Panorama.

HSBC says it won't comment on many of the specific allegations because of ongoing criminal investigations and because of Swiss bank secrecy laws.

But HSBC also says it has now embarked on a radical clean-up of its Swiss act. It says it has not only introduced "strict controls" on cash withdrawals, but also ended the "hold mail service" (the practice of not sending giveaway letters to customers' home countries); and got rid of 70% of its previous customers.

"HSBC has implemented numerous initiatives designed to prevent its banking services being used to evade taxes or launder money."

Part two:
QuoteCash pilgrims and bricks of money: HSBC Swiss bank operated like cash machine for rich clients
Cache of leaked data show how throughout 2005, scores of account holders arrived in Geneva, often emerging with currency foreign to Switzerland
David Leigh, James Ball, Juliette Garside and David Pegg
Monday 9 February 2015 14.00 GMT

Not far from the Jet d'Eau, the famous Lake Geneva fountain, a huge rooftop sign proudly declared: "HSBC Private Bank". Money didn't just talk here: it shouted. But the actual facts of what went on inside No 2, Rue Dr-Alfred-Vincent were less well publicised. Through its revolving doors, a stream of visitors slipped in and then out again with packets of cash in untraceable banknotes.

From information contained in leaked files from HSBC's Swiss subsidiary, the Guardian has been able to reconstruct a diary of a year in the life of HSBC's cash machine. Large cash transactions are a classic warning sign to bankers. But instead of blocking the withdrawals or even interrogating them, the bank repeatedly handed out packets of untraceable banknotes.

Specialist UK tax barrister Jolyon Maugham says: "Why on earth would you travel to Switzerland to take out sterling in cash? Why would you not just ask the Swiss branch to wire the money to your bank account in the UK? I struggle to see an answer to that question that doesn't involve you wanting to obscure from the UK tax authorities the fact that you have money in a Swiss bank account."

Only when these facts later leaked out did the bank reform. It says it now seeks to operate "strict controls" on withdrawals of more than £6,600.

Day by day, throughout 2005, a succession of holders of numbered accounts arrived, from the UK, France, Germany, Scandinavia, the US, Italy, Spain, Belgium and the Netherlands. They often emerged with currency of little use in Switzerland itself. These British pounds, euros, US dollars, even Danish krone, were for spending at home, or sometimes to buy villas and flats abroad.

Some clients have been frank that they were dodging tax. Retired accountant Andrew Sebastian, who collected a total of £50,000 cash that year, said that since the HSBC data leaked out, he had settled with HMRC for a payment of £42,722.

A British antiques dealer, Caroline Carrier, picked up £12,000 cash in April and another £12,000 in August. She told the Guardian the matter had been "settled legally" in 2010, and HMRC had now collected all the taxes due on her inherited account.

Others have denied wrongdoing or offered no explanation for their withdrawals when contacted by the Guardian. In the absence of any explanation, it is not possible to assess whether the withdrawals were for legitimate purposes.

Arlette Ricci, the Nina Ricci perfume heiress, had the equivalent of £15m in Swiss accounts. The bank provided her with 10 packets of €7,500 each throughout 2005, totalling about £60,000. She denies all wrongdoing.

Jewellery trader Harry Fane, younger son of the Earl of Westmorland, who had a total of up to £700,000 in HSBC Swiss accounts, confided to the bank that he wanted large sums of cash "to fund ongoing building work on his property in London". His lawyer told the Guardian his financial affairs were private, had been conducted entirely lawfully, the accounts were now closed and no tax was outstanding on them.

Hanne Tox, the widow of a Danish industrialist, did not respond to invitations to comment. She took away a total of 200,000 krone (about £21,000), from a £1.25m offshore trust account. According to the files, HSBC noted that all contact must go via a relative in London, "critical, as it is a criminal act having an account abroad non-declared".

Another Dane who collected cash in Switzerland was meat trader Torben Lenzberg. Lenzberg's Danish phone number on the bank file is marked "DO NOT CONTACT!" This again could suggest the bank was aware of a clash with Danish law. HSBC says it has since banned its Swiss "hold mail service" under which it kept all correspondence and made no giveaway phone calls. Lenzberg has not commented.


Another Briton, recorded as having a £2m share in an inherited trust fund, went half a dozen times to the bank's Zurich branch. She collected £70,000 over the year, insisting she wanted British low-denomination "used notes".

With untraceable cash, tax returns become voluntary. Former tax inspector Richard Brooks told the Guardian: "If you withdraw cash from a bank in Geneva or Zurich, there's no trail of that over here. Most rich individuals will get their accountants to fill in their tax returns. They'll be working from their banking records. But there's nothing for your accountant to see."

One particularly large handover by the bank of $100,000 (£66,000) to Swiss tax-resident diamond trader Beny Steinmetz was accompanied by an innocent explanation. He told the bank it was for travel expenses and fuel for trips to South Africa and Russia. (He says he fully complied with all applicable laws).

Eufemiano Fuentes, a Spanish doctor, later to be convicted of sports doping, whose offshore funds came from illegal doping of racing cyclists, withdrew a total of €265,000 in cash in the course of the year, claiming it was to buy a boat and to pay hospital bills for his daughter.


More normal withdrawals were equivalent to £10,000 to £20,000 a time. The UK cash pilgrims also included property traders, a diet clinic owner and a toy manufacturer. In one ingenious racket, HSBC manager Nessim Elmaleh pleaded guilty in 2013 to a deft laundering operation in which wealthy HSBC clients in Paris would get untraceable cash generated from the proceeds of big drug deals in the city. Elmaleh would reconcile the payments by transferring funds from the clients' accounts to those of the drug kingpins.

The files show the bank reassuring another Briton who collected £30,000 in cash "in a hurry", HSBC noted. "He was under the impression that the Swiss banking secrecy was being lifted and the family are therefore trying to remove their assets. I informed them that this was not the case and that they had no need to reduce their account so quickly."

The British owner of a furniture store in central London made clear his unlawful intentions. According to the leaked files, he said: "What is the point of having money 'offshore' if one cannot have access to it?"

The bank said he wanted "to have someone who would bring cash to him in the UK. He is not interested in the service that we could possibly provide him at HSBC Premier in Knightsbridge, as he would have to identify himself by passport! He said, 'I do know banks in your part of the world who are able to provide this service, using ... their representative in Panama to bring in cash.'"

But HSBC managers refused to courier such cash themselves across borders. They told him instead that they were prepared to offer "passive", but not "active" assistance.

Despite its self-protective caution, HSBC does however appear to have tipped its customers off to behaviour that might alert the taxman. In another case, a banker said two clients "asked about taking cash into the UK. I told them that the 'limit' was £10,000 – information obtained from HSBC Compliance in London who had spoken to HM Customs in 2003... If a person with funds in excess of £10,000 is stopped by HM Customs he had better have the right answers."

US surgeon Andrew Silva admitted in 2010 that HSBC's Swiss bank deliberately gave him "bricks" of $100,000 in notes, to secretly post home in a series of envelopes. According to court papers, the bank told its client not to wire money because that would "create a trail for US authorities". In a 2013 US prosecution, Vaibhav Dahake, a New Jersey businessman, similarly admitted HSBC bankers warned him not to carry in more than $10,000 in illegal funds, but to "stay below the radar".

US attorney Paul Fishman said at the time: "Bankers should encourage their clients to comply with the law, not advise them how to break it."
Title: Re: HSBC leaks
Post by: Sheilbh on February 09, 2015, 11:46:34 AM
Probably a headline most banks would like to avoid:
QuoteLeaked List Shows HSBC's Swiss Arm Helped Putin Allies, Drug Lords and Fugitives Hide
http://www.bloomberg.com/news/articles/2015-02-08/leaked-hsbc-list-shows-who-was-banking-on-swiss-secrecy

And Lord Lawson - Thatcher's Chancellor, creator of the Big Bang - has called for the banks to be broken up.
Title: Re: HSBC leaks
Post by: Martinus on February 09, 2015, 11:47:50 AM
Absolutely nothing will happen as a result.  :bowler:
Title: Re: HSBC leaks
Post by: Martinus on February 09, 2015, 11:49:30 AM
Quote from: Sheilbh on February 09, 2015, 11:46:34 AM
Probably a headline most banks would like to avoid:
QuoteLeaked List Shows HSBC's Swiss Arm Helped Putin Allies, Drug Lords and Fugitives Hide
http://www.bloomberg.com/news/articles/2015-02-08/leaked-hsbc-list-shows-who-was-banking-on-swiss-secrecy

And Lord Lawson - Thatcher's Chancellor, creator of the Big Bang - has called for the banks to be broken up.

About a year ago another big bank (or was it also HSBC) was involved in knowingly laundering money of drug cartels, Iran and AQ. And nothing happened then either.

Holder's Doctrine (you cannot criminally prosecute banks' top brass as that would threaten the financial system) is alive and well.
Title: Re: HSBC leaks
Post by: Sheilbh on February 09, 2015, 11:51:46 AM
I'm with Iain Martin:
http://www.capx.co/megabanks-are-too-big-to-fail-bail-and-jail/

Also Marti should be sent to the guillotine <_<
Title: Re: HSBC leaks
Post by: Martinus on February 09, 2015, 11:56:09 AM
Quote from: Sheilbh on February 09, 2015, 11:51:46 AM
I'm with Iain Martin:
http://www.capx.co/megabanks-are-too-big-to-fail-bail-and-jail/

Also Marti should be sent to the guillotine <_<

I never said I agree with that. I was just stating the fact. Don't kill the messenger.
Title: Re: HSBC leaks
Post by: CountDeMoney on February 09, 2015, 12:12:10 PM
Quote from: Martinus on February 09, 2015, 11:56:09 AM
Quote from: Sheilbh on February 09, 2015, 11:51:46 AM
Also Marti should be sent to the guillotine <_<

I never said I agree with that. I was just stating the fact. Don't kill the messenger.

No shit, Sheilbh.  It's just the way it is, and it's the way it's always going to be. 

No accountability?  No problem!
Title: Re: HSBC leaks
Post by: Martinus on February 09, 2015, 12:20:59 PM
The Brits are a curious bunch, by the way.

Their press is always so much sound and fury on anything from cheating, corrupt banks, to Russian oligarchs, to evil Saudis, to eavesdropping media moguls - you name it. Yet they are most unbashed in the fact that their entire economy is based on serving these crooks in every way imaginable. To be honest, I can't think of any other world power class government being so much in the pocket of big money - no matter where it comes from.

At least Americans, the French, Russians or the Chinese tend to prefer their own oligarchs. Only the Brits are a perfect whore.
Title: Re: HSBC leaks
Post by: Sheilbh on February 09, 2015, 12:25:53 PM
What can I say? We're not bigoted :P
Title: Re: HSBC leaks
Post by: Razgovory on February 09, 2015, 01:08:26 PM
Quote from: CountDeMoney on February 09, 2015, 12:12:10 PM
Quote from: Martinus on February 09, 2015, 11:56:09 AM
Quote from: Sheilbh on February 09, 2015, 11:51:46 AM
Also Marti should be sent to the guillotine <_<

I never said I agree with that. I was just stating the fact. Don't kill the messenger.

No shit, Sheilbh.  It's just the way it is, and it's the way it's always going to be. 

No accountability?  No problem!

He still should be sent to the Guillotine.
Title: Re: HSBC leaks
Post by: Archy on February 09, 2015, 07:33:54 PM
I see one positive note that apparently the swiss banks are feeling the heat yo comply an that apparently the swiss banking secrecy is crumbling
Title: Re: HSBC leaks
Post by: Monoriu on February 09, 2015, 08:41:33 PM
I can sleep well knowing that the HSBC managers are working hard for us shareholders  :lol:
Title: Re: HSBC leaks
Post by: Martinus on February 10, 2015, 01:24:08 AM
Quote from: Monoriu on February 09, 2015, 08:41:33 PM
I can sleep well knowing that the HSBC managers are working hard for us shareholders  :lol:

I can't wait until the next CEO writes off all dubious assets, flushing the share price down the toilet together with your retirement plan.  :nelson:
Title: Re: HSBC leaks
Post by: Monoriu on February 10, 2015, 01:43:39 AM
Quote from: Martinus on February 10, 2015, 01:24:08 AM
Quote from: Monoriu on February 09, 2015, 08:41:33 PM
I can sleep well knowing that the HSBC managers are working hard for us shareholders  :lol:

I can't wait until the next CEO writes off all dubious assets, flushing the share price down the toilet together with your retirement plan.  :nelson:

Why?  I'll simply buy more if the share price crashes.  HSBC absolutely dominates in HK (the "H" in HSBC is Hong Kong), and the majority of their profits come from here.  Their Swiss arm is probably not that significant even if it disappears.  Heck, their US arm was basically destroyed in 07/08 and they are still alive and kicking. 
Title: Re: HSBC leaks
Post by: Martinus on February 10, 2015, 01:49:18 AM
You are really a bizarre person. Sorry, I made myself a promise not to attack personally any posters, but you continue to astound me as probably the most pathetic, despicable git on Languish.

The most ironic part for me is that many people here are benefiting much more from the system than you are, but that does not stop them from discussing its less-than-stellar parts, whereas you seem to be buying the system's propaganda hook and sinker.

I would say that you are one of those people who would be first against the wall when the revolution comes, but that's probably not true - most revolutionaries would probably consider that a waste of a good bullet. That is assuming you actually would not have joined revolutionary tribunals and started to pass death sentences. 
Title: Re: HSBC leaks
Post by: CountDeMoney on February 10, 2015, 01:51:29 AM
Quote from: Martinus on February 10, 2015, 01:49:18 AM
I made myself a promise not to attack personally any posters,

:lol:
Title: Re: HSBC leaks
Post by: Jacob on February 10, 2015, 01:53:43 AM
Quote from: Martinus on February 10, 2015, 01:49:18 AM
...but you continue to astound me as probably the most pathetic, despicable git on Languish.

This week.

Next week it'll be someone else.
Title: Re: HSBC leaks
Post by: Monoriu on February 10, 2015, 02:06:36 AM
Quote from: Martinus on February 10, 2015, 01:49:18 AM
You are really a bizarre person. Sorry, I made myself a promise not to attack personally any posters, but you continue to astound me as probably the most pathetic, despicable git on Languish.

The most ironic part for me is that many people here are benefiting much more from the system than you are, but that does not stop them from discussing its less-than-stellar parts, whereas you seem to be buying the system's propaganda hook and sinker.

I would say that you are one of those people who would be first against the wall when the revolution comes, but that's probably not true - most revolutionaries would probably consider that a waste of a good bullet. That is assuming you actually would not have joined revolutionary tribunals and started to pass death sentences.

Hong Kong's stock market index is known as the Hang Seng.  Hang Seng is the name of the bank that compiles the index, and it is the second largest bank in Hong Kong after HSBC.  Guess what, the majority shareholder of Hang Seng Bank is also HSBC.  The current dividend yield is over 5%, and I consider it a good buy at current prices. 
Title: Re: HSBC leaks
Post by: Sheilbh on February 10, 2015, 04:36:56 AM
Mono, this attracting any interest in China:
http://bigstory.ap.org/article/1eb881e1a7c64852897109abaa0b3766/swiss-leaks-show-deposit-daughter-chinas-ex-premier
Title: Re: HSBC leaks
Post by: Monoriu on February 10, 2015, 04:40:53 AM
Quote from: Sheilbh on February 10, 2015, 04:36:56 AM
Mono, this attracting any interest in China:
http://bigstory.ap.org/article/1eb881e1a7c64852897109abaa0b3766/swiss-leaks-show-deposit-daughter-chinas-ex-premier

The HSBC story is in the headlines today, and Li Peng's daughter is reported as well.  I guess the only surprise is that she only had $2-3 million.  People expected more. 
Title: Re: HSBC leaks
Post by: Warspite on February 10, 2015, 10:22:09 AM
Quote from: Martinus on February 09, 2015, 12:20:59 PM
The Brits are a curious bunch, by the way.

Their press is always so much sound and fury on anything from cheating, corrupt banks, to Russian oligarchs, to evil Saudis, to eavesdropping media moguls - you name it. Yet they are most unbashed in the fact that their entire economy is based on serving these crooks in every way imaginable. To be honest, I can't think of any other world power class government being so much in the pocket of big money - no matter where it comes from.

At least Americans, the French, Russians or the Chinese tend to prefer their own oligarchs. Only the Brits are a perfect whore.

Or, indeed, our press are so much sound and fury on, err, a British bank.

Also, I'm not sure that private wealth is that important to the British economy, especially given that most of the financial services sector is actually much more boring forms of moving money around.

You really are a curious one, Marty.
Title: Re: HSBC leaks
Post by: The Minsky Moment on February 10, 2015, 11:14:19 AM
Quote from: Martinus on February 09, 2015, 11:49:30 AM
Holder's Doctrine (you cannot criminally prosecute banks' top brass as that would threaten the financial system) is alive and well.

First of all Holder's memo had nothing to do with prosecuting "top brass".  It was addressed solely to prosecution of corporations at entities.

Second it was not specific to banks or any particular kind of corporation.

Third, the part of the memo that addressed "collateral consequences" is also general and merely states that prosecutors in their discretion "may consider" those consequences in their charging decisions.  It concludes: "the balance may tip in favor of prosecuting corporations in situations where the
scope of the misconduct in a case is widespread and sustained within a corporate ... In such cases. . . visiting
punishment for the corporation's crimes upon shareholders may be of much less concern where those
shareholders have substantially profited, even unknowingly, from widespread or pervasive criminal
activity. Similarly, where the top layers of the corporation's management or the shareholders of a closely held corporation were engaged in or aware of the wrongdoing and the conduct at issue was accepted as away of doing business for an extended period, debarment may be deemed not collateral but a direct and
entirely appropriate consequence of the corporation's wrongdoing."

The Holder memo's collateral consequences doctrine thus did not prevent the ill-advised and extremely damaging prosecution of Arthur Andersen as an entity, resulting in no conviction but in the utter destruction of the firm.
Title: Re: HSBC leaks
Post by: viper37 on February 10, 2015, 04:39:59 PM
Quote from: The Minsky Moment on February 10, 2015, 11:14:19 AM
The Holder memo's collateral consequences doctrine thus did not prevent the ill-advised and extremely damaging prosecution of Arthur Andersen as an entity, resulting in no conviction but in the utter destruction of the firm.
why was it ill-advised?
Title: Re: HSBC leaks
Post by: CountDeMoney on February 10, 2015, 04:44:04 PM
Quote from: The Minsky Moment on February 10, 2015, 11:14:19 AM
resulting in no conviction but in the utter destruction of the firm.

As usual, getting away with it.
Title: Re: HSBC leaks
Post by: The Minsky Moment on February 10, 2015, 05:29:00 PM
Quote from: viper37 on February 10, 2015, 04:39:59 PM
Quote from: The Minsky Moment on February 10, 2015, 11:14:19 AM
The Holder memo's collateral consequences doctrine thus did not prevent the ill-advised and extremely damaging prosecution of Arthur Andersen as an entity, resulting in no conviction but in the utter destruction of the firm.
why was it ill-advised?

For several reasons.  First because the charge centered around the actions of a few individuals, so if there was a basis for a criminal charge, those individuals should have charged, not the firm.  Second, the criminal charges were quite weak and picked apart by a unanimous Supreme Court.  Third, the consequence was a very unhealthy concentration in the public company audit market - this was definitely a case where concerns about collateral consequences should have come into play.  In fact, right now the Big 4 probably are immune from prosecution because the consequences of killing off another one would be catastrophic.

Then of course there are the tens of thousands of people who lost their jobs . . .
Title: Re: HSBC leaks
Post by: viper37 on February 11, 2015, 10:55:40 AM
Quote from: The Minsky Moment on February 10, 2015, 05:29:00 PM
For several reasons.  First because the charge centered around the actions of a few individuals, so if there was a basis for a criminal charge, those individuals should have charged, not the firm.  Second, the criminal charges were quite weak and picked apart by a unanimous Supreme Court.

Seperating the consequences from the trials is necessary, imho.  A prosecutor should not ask himself what are the consequences of doing justice, he should do justice by pressing charges about those he believes to be guilty.

But if the case is too weak, than it's another matter.

Quote
Third, the consequence was a very unhealthy concentration in the public company audit market - this was definitely a case where concerns about collateral consequences should have come into play.  In fact, right now the Big 4 probably are immune from prosecution because the consequences of killing off another one would be catastrophic.

Then of course there are the tens of thousands of people who lost their jobs . . .
Well, see, there were similar arguments made here about engineering firms guilty of colluding with each another to inflate prices.  They were excluded from all public bidding for a short time, and many thought it was too harsh a punishment, that it would crush our firms and force the shareholders to sell to American and other foreign interests.

Notwithstanding the fact that this selling process was already started prior to this, my opinion was that there needed to be a punishment for company founders and shareholders to allow this to happen.  If they are forced to sell their company for a fraction of what it's really worth, than in the future, others will think twice about colluding, and employees who risk losing their jobs will think twice about going along with this without speaking.

As for the concentration of the industry, it might have happenned otherwise, and avoiding prosecution is not a good way to prevent concentration.  In fact, if firms are already colluding with each another to exclude other firms, the end result is very similar.
Title: Re: HSBC leaks
Post by: Grey Fox on February 11, 2015, 10:59:30 AM
Quote from: Martinus on February 10, 2015, 01:49:18 AM
You are really a bizarre person. Sorry, I made myself a promise not to attack personally any posters, but you continue to astound me as probably the most pathetic, despicable git on Languish.

The most ironic part for me is that many people here are benefiting much more from the system than you are, but that does not stop them from discussing its less-than-stellar parts, whereas you seem to be buying the system's propaganda hook and sinker.

I would say that you are one of those people who would be first against the wall when the revolution comes, but that's probably not true - most revolutionaries would probably consider that a waste of a good bullet. That is assuming you actually would not have joined revolutionary tribunals and started to pass death sentences.

Yes, Mono is Han Chinese.
Title: Re: HSBC leaks
Post by: Jacob on February 11, 2015, 11:37:55 AM
Quote from: Grey Fox on February 11, 2015, 10:59:30 AMYes, Mono is Han Chinese.

He's hardly representative.
Title: Re: HSBC leaks
Post by: Martinus on February 11, 2015, 11:44:54 AM
Quote from: Jacob on February 11, 2015, 11:37:55 AM
Quote from: Grey Fox on February 11, 2015, 10:59:30 AMYes, Mono is Han Chinese.

He's hardly representative.

He is the only one we have.
Title: Re: HSBC leaks
Post by: Valmy on February 11, 2015, 11:55:01 AM
Is he Han?  I thought Hong Kongers were Cantonese.
Title: Re: HSBC leaks
Post by: Admiral Yi on February 11, 2015, 11:56:19 AM
Han is everybody except Tibetans, Mongolians, Manchus, and Uighors.
Title: Re: HSBC leaks
Post by: Duque de Bragança on February 11, 2015, 12:06:54 PM
Hui Chinese (Chinese-speaking Muslims) are more of then than not distinguished from Han Chinese. Mono?
Title: Re: HSBC leaks
Post by: The Minsky Moment on February 11, 2015, 12:09:16 PM
Quote from: viper37 on February 11, 2015, 10:55:40 AM
Seperating the consequences from the trials is necessary, imho.  A prosecutor should not ask himself what are the consequences of doing justice, he should do justice by pressing charges about those he believes to be guilty.

If the target is an individual I agree without question.  Everyone is equal before the law, no fear, no favor.

But entity prosecutions to my mind are different.  My own 2c is that criminal liability for entities is a questionable idea in the first place (AA is a good example of how pursuing the entity can actually diffuse individual responsibility).  But even accepting the principle of entity prosecution, then it follows logically that the objective is a policy based one of shaping corporate conduct.  In that sense consequences matter and should be taken into consideration.

QuoteNotwithstanding the fact that this selling process was already started prior to this, my opinion was that there needed to be a punishment for company founders and shareholders to allow this to happen.  If they are forced to sell their company for a fraction of what it's really worth, than in the future, others will think twice about colluding, and employees who risk losing their jobs will think twice about going along with this without speaking.

Holder's memo addresses this very issue - it indicates that where shareholders have profited from wrongdoing and/or employees have colluded that concerns over collateral consequences are lessened.  It is a factor the *may* be considered - only one factor, and not necessarily determinative.

The AA case to my mind is pretty extreme because: (1) the merits of the case were questionable, (2) very few individuals were complicit even indirectly, (3) there was little pecuniary benefit, (4) the collateral consequences were so dire.
Title: Re: HSBC leaks
Post by: MadImmortalMan on February 11, 2015, 03:56:03 PM
(https://pbs.twimg.com/media/B9lnmBEIUAANyMi.jpg:large)
Title: Re: HSBC leaks
Post by: Monoriu on February 11, 2015, 05:24:41 PM
Quote from: Admiral Yi on February 11, 2015, 11:56:19 AM
Han is everybody except Tibetans, Mongolians, Manchus, and Uighors.

Yes, basically.  Cantonese, Shanghainese, Hunanese etc are all Han.  Han is like 90%+ of China. 
Title: Re: HSBC leaks
Post by: Admiral Yi on February 11, 2015, 05:26:08 PM
BTW, how Hanified are Manchus?  Can you tell a Manchu is a Manchu?
Title: Re: HSBC leaks
Post by: Monoriu on February 11, 2015, 05:31:38 PM
Quote from: Admiral Yi on February 11, 2015, 05:26:08 PM
BTW, how Hanified are Manchus?  Can you tell a Manchu is a Manchu?

There is basically no difference any more.  My grandmother is a Manchu.  You can't tell.  The language is as good as dead. 
Title: Re: HSBC leaks
Post by: Sheilbh on February 11, 2015, 07:25:07 PM
A summary of where we are from a UK perspective:
QuoteThe HSBC files: What we know so far
Repercussions of biggest leak of confidential banking data ever ripple around the world as governments pledge to pursue alleged tax evaders and former HSBC executives and tax officials face intense scrutiny
Mark Tran
@marktran
Wednesday 11 February 2015 17.01 GMT

• On Monday, the Guardian, the BBC, Le Monde and 50 other media outlets reveal that HSBC's Swiss banking arm helped wealthy customers dodge taxes and conceal millions of dollars of assets, doling out bundles of untraceable cash and advising clients on how to circumvent domestic tax authorities. The HSBC files consist of thousands of pages made available via the International Consortium of Investigative Journalists. Covering the period 2005-07, they amount to the biggest banking leak in history, shedding light on some 30,000 accounts holding almost $120bn (£78bn) of assets. Many of the accounts belonged to prominent figures in business, film, music and sport, and the heads of royal families.

Key article: HSBC files show how Swiss bank helped clients dodge taxes

HSBC said its Swiss branch had not been fully integrated into HSBC after its purchase in 1999, allowing "significantly lower" standards of compliance and due diligence to persist.

Key article: 'Standards of due diligence were significantly lower than today'

• Hervé Falciani, who worked for 10 years at HSBC Private Bank Suisse as a computer analyst, stole the incriminating information from his employer. The tax authorities seized the data in 2008.

Key article: Hervé Falciani to keep up fight against tax dodgers

• On Tuesday, the political firestorm began as the UK Treasury minister David Gauke faced hostile questioning from MPs to defend the government's efforts to clamp down on tax evasions. Outside the UK, calls mounted for investigations into HSBC's Swiss subsidiary.

Key article: International outcry over activities at bank's Swiss arm

HSBC was led during the period covered in the files by Stephen Green – now Lord Green – who served as the global bank's chief executive, then group chairman, until 2010, when he left to become a trade minister in the House of Lords for David Cameron's new government.

Key article: The ethical banker with questions to answer

In five years HM Revenue & Customs (HMRC), Britain's tax authority, used the data to bring only one prosecution. France, Belgium, Spain, the US and Argentina have launched legal proceedings against HSBC and its high net worth clients. So far, £135m has been recovered from HSBC clients in the UK. France has recovered £188m in taxes and fines from a list of 3,000 clients and Spain has recovered £220m, also from 3,000 clients. Australia said it had recovered more than A$30m (£15m) over the past five years.

Key article: HMRC had data on misconduct before bank boss made trade minister

HMRC failed to warn that there was serious evidence of misconduct at HSBC's Swiss arm despite being asked to vet Green over his suitability to become minister. HMRC had received a disc in 2010 with 6,000 names "all ripe for investigation" David Hartnett, told MPs on the Treasury select committee in 2011. Then head of tax at HMRC, Hartnett went on to work for HSBC as a consultant after his retirement two years after the data was handed over.

Key article: HMRC cleared bank boss for peerage despite misconduct data

The leaked files reveal the identities of donors to the Bill, Hillary & Chelsea Clinton Foundation with HSBC accounts in the tax haven, including Jeffrey Epstein, the hedge fund manager and convicted sex offender. The revelations have raised questions over the former secretary of state's campaigning focus on wealth inequality in light of the close relationships she and her husband have nurtured with some of the world's richest individuals.

Key article: Clinton foundation received up to $81m from clients of controversial HSBC bank

• On Wednesday, the Guardian reported that HSBC in Switzerland aggressively marketed tax-avoidance strategies to its wealthy clients. It proactively contacted clients in 2005 to suggest ways to avoid a new tax levied on the Swiss savings accounts of EU citizens, a measure brought in through a treaty between Switzerland and the EU to tackle secret offshore accounts.

Key article: Swiss bank aggressively pushed way for clients to avoid new tax

Conservative donors, peers and a high-profile MP are listed among the wealthy who legally held accounts in Switzerland with HSBC's private bank, for a wide variety of reasons. Their ranks include Zac Goldsmith, MP for Richmond Park, plus his brother the financier Ben Goldsmith, and a Swiss resident, the German-born car company heir Georg von Opel, who has donated six-figure sums in the past two years.

Key article: Tories raised over £5m from HSBC Swiss account holders

• International reaction: The Spanish government is considering legal action against HSBC. The finance minister, Cristóbal Montoro, has asked for a "study of the legal actions that can be taken against HSBC" over the 2,694 Spaniards holding accounts in the Swiss subsidiary, with savings of $2.3bn (£1.5bn). Barack Obama's attorney general nominee, Loretta Lynch, said the bank could face tax-evasion charges if there were sufficient evidence, despite a settlement she reached with HSBC two years ago over money-laundering with Mexican drug cartels and breaches of US sanctions. In Belgium, a judge was already considering issuing international arrest warrants for directors of HSBC over tax fraud allegations. In Denmark, the government said it would seek the names of its citizens who may have used Swiss bank accounts to avoid domestic taxes.

Key articles: Spanish government considers legal action against HSBC

• In a rowdy session of prime minister's questions on Thursday, the Labour leader, Ed Miliband, accused David Cameron of acting as a "dodgy prime minister" after he repeatedly failed in the House of Commons to say whether he had discussed tax avoidance at HSBC with Stephen Green before appointing him as trade minister in 2011.

Key article: Ed Miliband attacks 'dodgy' PM for failure to answer HSBC tax questions
Title: Re: HSBC leaks
Post by: Monoriu on February 11, 2015, 07:34:21 PM
Quote from: MadImmortalMan on February 11, 2015, 03:56:03 PM
(https://pbs.twimg.com/media/B9lnmBEIUAANyMi.jpg:large)

A bit surprised that there are so few clients from HK and China, given HSBC's popularity over here.  I guess the main motivation for having a Swiss banking account is for tax purpose, and there isn't much tax on capital to speak of in Hong Kong anyway.  So far the only prominent case reported in the news is the daughter of Li Peng, the Chinese premier during Tian An Men, and the amount involved is tiny.  The news doesn't have much impact on this side of the world.  Some journalists are outraged, I'm sure, but the general reaction is meh.  HSBC's share price declined by like 1-2%, but this is consistent with a minor overall market correction. 
Title: Re: HSBC leaks
Post by: Martinus on February 12, 2015, 01:34:11 AM
Wouldn't that assume the leak applied equally to customers from all countries?
Title: Re: HSBC leaks
Post by: Monoriu on February 12, 2015, 01:56:43 AM
Quote from: Martinus on February 12, 2015, 01:34:11 AM
Wouldn't that assume the leak applied equally to customers from all countries?

Yes.  Though I don't see any evidence to suggest otherwise.  I think the HK/Chinese billionaires tend to put their wealth in real estate or shares in their family businesses.  There is less of a tradition to entrust one's wealth to money managers here. 
Title: Re: HSBC leaks
Post by: Sheilbh on February 12, 2015, 06:54:36 PM
Oh good:
http://www.theguardian.com/news/2015/feb/12/hsbc-files-swiss-bank-hid-money-for-suspected-criminals
Title: Re: HSBC leaks
Post by: Monoriu on February 12, 2015, 07:08:47 PM
Quote from: Sheilbh on February 12, 2015, 06:54:36 PM
Oh good:
http://www.theguardian.com/news/2015/feb/12/hsbc-files-swiss-bank-hid-money-for-suspected-criminals

Innocent until proven guilty  ;)
Title: Re: HSBC leaks
Post by: Jacob on February 12, 2015, 07:12:30 PM
Quote from: Monoriu on February 12, 2015, 07:08:47 PM
Quote from: Sheilbh on February 12, 2015, 06:54:36 PM
Oh good:
http://www.theguardian.com/news/2015/feb/12/hsbc-files-swiss-bank-hid-money-for-suspected-criminals

Innocent until proven guilty  ;)

For sure. Let's get all the information out in the open and determine whether they're guilty or not.

The bank, however, may already be guilty of breaking laws and acting unethically independent of the guilt of particular individual clients.
Title: Re: HSBC leaks
Post by: Monoriu on February 12, 2015, 07:23:01 PM
Somehow I think HSBC's Swiss arm is done after this.  Nobody wants to be known as an HSBC Swiss client, because they are afraid that others will assume that they are criminals.  Just sell it off and be done with it. 
Title: Re: HSBC leaks
Post by: Martinus on February 13, 2015, 01:21:14 AM
I agree with Jacob - only the guilty have something to hide.
Title: Re: HSBC leaks
Post by: Monoriu on February 13, 2015, 01:38:10 AM
Quote from: Martinus on February 13, 2015, 01:21:14 AM
I agree with Jacob - only the guilty have something to hide.

My mother-in-law was born in a landowning family in mainland China.  Her family lost everything when the communists took over, and they moved to Hong Kong.  She still keeps a substantial part of her savings in an overseas bank account due to her distrust of the communists.  She is just a retired police sergeant, BTW. 
Title: Re: HSBC leaks
Post by: Martinus on February 13, 2015, 01:47:36 AM
It was sarcasm, Mono.
Title: Re: HSBC leaks
Post by: viper37 on February 13, 2015, 01:56:25 PM
Quote from: Monoriu on February 13, 2015, 01:38:10 AM
Quote from: Martinus on February 13, 2015, 01:21:14 AM
I agree with Jacob - only the guilty have something to hide.

My mother-in-law was born in a landowning family in mainland China.  Her family lost everything when the communists took over, and they moved to Hong Kong.  She still keeps a substantial part of her savings in an overseas bank account due to her distrust of the communists.  She is just a retired police sergeant, BTW. 
Someone finally understands while banking secrecy is a must for many honest people.  Of course, it had to be Mono. :)
You're my favorite Chinese with a Canadian passport on Languish now&forever :)
Title: Re: HSBC leaks
Post by: viper37 on February 19, 2015, 11:58:05 AM
I do like how media make their titles:
Ottawa gains 1349 bank files (http://affaires.lapresse.ca/dossiers/litiges-economiques/201502/19/01-4845542-scandale-hsbc-ottawa-obtient-1349-dossiers-bancaires.php)  The article is in french, couldn't be bothered to find the english link.


Anyway.  Once you read through the article, it says 154 of these files are double, 801 had nothing in it and only 394 had been judged "high risk".  Overblown story on our side, methinks.  Not that it's not a good thing to go after criminals and other people evading taxes, but it's far from the solution to all problems as the left would like us to believe.