Complicit bankers have nothing to fear from the U.S. justice system.

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http://www.bloomberg.com/news/2013-03-31/money-laundering-banks-still-get-a-pass-from-u-s-.html

Money laundering by large international banks has reached epidemic proportions, and U.S. authorities are supposedly looking into Citigroup Inc. (C) and JPMorgan Chase & Co.

Governor Jerome Powell, on behalf of the Board of Governors of the Federal Reserve System, recently testified to Congress on the issue, and he sounded serious. But international criminals and terrorists needn’t worry. This is window dressing: Complicit bankers have nothing to fear from the U.S. justice system.

To be on the safe side, though, miscreants should be sure to use a really large global bank for all their money-laundering needs.

There may be fines, but the largest financial companies are unlikely to face criminal actions or meaningful sanctions. The Department of Justice has decided that these banks are too big to prosecute to the full extent of the law, though why this also gets employees and executives off the hook remains a mystery. And theFederal Reserve refuses to rescind bank licenses, undermining the credibility, legitimacy and stability of the financial system.

To see this perverse incentive program in action, consider the recent case of a big money-laundering bank that violated a deferred prosecution agreement with the Justice Department, openly broke U.S. securities law and stuck its finger in the eye of the Fed. This is what John Peace, the chairman of Standard Chartered Plc (STAN), and his colleagues managed to get away with March 5. The meaningful consequences for him or his company are precisely zero.

At one level, this is farce. Standard Chartered has long conceded that it broke U.S. money-laundering laws in spectacular and prolonged fashion. In late 2012, it entered into a deferred prosecution agreement with the Justice Department, agreeing to pay a fine that amounts to little more than a slap on the wrist (in any case, such penalties are paid by shareholders, not management).

Then, on a March 5 conference call with investors, Peace denied that his bank and its employees had willfully broken U.S. law with their money-laundering activities. This statement was a clear breach of the deferred prosecution agreement (see paragraph 12 on page 10, where the bank agreed that none of its officers should make “any public statement contradicting the acceptance of responsibility by SCB set forth above or the facts described in the Factual Statement”). Any such statement constitutes a willful and material breach of the agreement.

This is where the theater of the absurd begins. For some reason, it took the bank 11 business days, not the required five, to issue a retraction. No doubt a number of people, in the private and public sectors, were asleep at the switch. (The Justice Department and Standard Chartered rebuffed my requests for details on the timeline.)

The implications of the affair are twofold. First, with his eventual retraction, Peace admitted that he misled investors. It also was an implicit admission that he had failed to issue a timely correction. Waiting 11 days to correct a material factual error is a serious breach of U.S. securities law for any nonfinancial company. Wake me when the Securities and Exchange Commission brings a case against Standard Chartered.

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absolutely correct..how many are doing jail time for the the worst financial crisis in our history?..none..just a few patsies charged with insider trading which is basically loose change..the system is a rort..

401

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~ by seeker401 on April 5, 2013.

5 Responses to “Complicit bankers have nothing to fear from the U.S. justice system.”

  1. hey seek. how do you think hunt would do tagging goodes?

    • goodes will play forward the majority so i dont think hunt will go with him..i think GCS at 8.25 is ridiculous..i picked them last week..i wont this week but they will push a slightly underdone sydney..

  2. Of course the bankers have nothing to worry about. Over here, we rather arrest and assassinate journalists that are trying to expose the truth (Look up Gary Webb). We also let the bankers control everything and give them what they want when they ask for it.

  3. gcs did ok considering how flogged their legs were from the previous week.

    big game against the lions. not to be taken lightly anymore the suns…

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