A truly Record year in fines paid in youd think all of life problems would be solved, but no Jail time for the truly corrupt elite or solving poverty with billions of dollars of fines paid in A few more scandals the banks are involved in BNP Paribas (the biggest French bank) had a fine of $8.9 billion levied on them by US authorities for using dollars in transactions with persons or countries subject to US economic sanctions. In another case, on 19 February, 2014 the Attorney General of Monaco, Jean-Pierre Dréno, started a judicial investigation for money laundering, complicity to launder money, concealment of money laundering, and false declarations against person or persons unknown following information received from the association Sherpa concerning practices by BNP Paribas Wealth Management in Monaco. [5] An internal report by the bank’s own inspectors, dated 25 October, 2011, found that the office concerned had received, from Gabon, Senegal, Burkina Faso and Madagascar, [6] tens of thousands of checks drawn by French nationals across 21 African countries which were misappropriated, without their knowledge, to be cashed in Monaco. This was done to avoid exchange controls, taxes and perhaps to launder money from organised crime. “This is a pleasant surprise because we have sent several letters to the Attorney General of Monaco since April 2013 and we had started to believe he had hesitations to act on this information;” rejoiced Sophia Lakhdar, President of Sherpa. Wait and see! In France, on 3 March, 2014, 400 customers filed a suit against a BNP-Paribas subsidiary that had granted them loans in Swiss Francs whose payments became increasingly onerous with the depreciation of the Euro. The customers are claiming €40 million in damages and interest. Deutsche Bank (the largest German bank) has been fined [7] or investigated in several recent affairs, some of which are still in progress: manipulation of the electricity market in California, where a fine has been paid; taking part during 2009-2010 in a fraudulent trade in CO2 emissions permits, linked to tax evasion; [8] covering up $12 billion in losses in derivatives trading in 2009; [9] manipulating the LIBOR (DB has been penalised by the European Commission, but is still awaiting decisions from the US and the UK); [10] bribing Japanese pension fund representatives between 2010 and 2013 – a DB executive was arrested in Tokyo in December 2013; [11] enquiries are ongoing into affairs concerning currency-market manipulations, gold and silver price rigging, [12] abusive sale of Mortgage-Backed Securities to the public mortgage agencies Fannie Mae and Freddie Mac in the US, and a legal wrangle with the Kirch media group, which accuses DB of causing their bankruptcy in 2002. [13] DB is also accused of money laundering by the Dubai authorities. [14] The bank owns a casino/hotel with 3,000 rooms – the Cosmopolitan – in Las Vegas. [15] In December 2013, the former director of the Hong Kong subsidiary was sentenced to 7 years in a Hong Kong prison for bribery. He pocketed illicit commissions for the sale of derivatives futures and was also sentenced to pay damages to DB. [16] Once again a scapegoat is penalised rather than the bank, which has the cheek to claim to be a victim. Royal Bank of Scotland (the 3rd-largest British bank) avoided failure in 2008 by being nationalised, and at the beginning of 2014 the British government still held 81% of its stock. RBS, and more precisely its Global Restructuring Group (GRG), is accused of causing the bankruptcy of numerous small and medium enterprises (SMEs) in order to grab their assets for less than their real value. [17] Lawrence Tomlinson, advisor to the British Ministry of Commerce, industry and Tourism, points an accusing finger and says, “It is undeniable that some of the banks, RBS in particular, are harming their customers through their decisions and causing their financial downfall.” SMEs that could have, once again, become going concerns have been steered into the wall by the GRG. Exorbitant penalties, in the hundreds of thousands of pounds, were claimed from them under pretexts such as minor infringements of credit conditions. Unable to pay, they were forced into closure. Another subsidiary of RBS would then intervene to cherry-pick the assets, and in particular the liquidated real estate. Another British control authority attacked RBS reticence to increase loans to SMEs and households while at the same time receiving funds for this purpose. Remember that RBS was fined during 2013-2014 by the European Commission, the US and the UK for its part in the LIBOR rigging scandal and was involved in the manipulation of the currency markets and the sale of toxic products on the US subprime market in 2007-2008. [18] RBS had to increase its provision for legal costs to face future fines, which had the effect of increasing its losses and deteriorating its equity/assets ratio, which is currently at half the ratio it has promised to attain for 2016. On 28 January 2014, French courts (Tribunal de Grande instance (TGI) de Paris) found Royal Bank of Scotland guilty of lack of counsel and information in a legal action brought by the city of Lille and suburbs, contesting three swap transactions. Crédit Suisse (Switzerland’s 2nd -ranking bank), along with 13 other Swiss banks including UBS and HSBC Switzerland, are all involved in organised tax evasion networks aimed at attracting big US fortunes. These fourteen banks are currently negotiating, with US authorities, a settlement of pending litigation and a return to a clean slate. The CEO of Crédit Suisse claims that a small number of bank employees had behaved badly and that management was unaware of their doings. The bank’s management declares: “We profoundly regret this behaviour, which was the work of only a few of our employees, but we accept full responsibility.” [19]) Finally, in May 2014, Crédit Suisse recognised its guilt and agreed to settle out of court, paying a fine of $2.6 billion to Washington authorities. [20] Crédit Suisse also paid a fine of €149 million to German authorities in a similar affair. Barclays (the 2nd-largest British bank): One clearly identified fault occurred on a day in 2012 when Barclays pressed down the price of gold to avoid paying a £2.3 million indemnity to one of its customers. It happened the day after the announcement that Barclays would be fined £290 million by US authorities for having taken part in LIBOR manipulations! Barclays has been involved in the sale of toxic mortgage products in the US, manipulation of the foreign exchange and gold markets and the electricity market in California (Barclays paid a fine of £26 million in May 2014 [21]), and physical supply and demand in the commodities market. [22] Barclays has also practised the fraudulent sale of retail insurance policies in the UK, money laundering, and is accused, in the UK, in an affair concerning illegal transactions with a Qatari fund in 2008. Despite the above, in February 2014 Barclays announced a 10% increase in the bonuses received by its managers and traders and the cutting of 10,000 to 12,000 jobs. Bank of America (the 2nd-largest US bank) has been involved in the sale of toxic subprime mortgages and the illegal expulsions of occupants from their homes after foreclosures. It is the bank that, up to now, has paid the highest fines in the US – $44 billion over the period 2010-2013. Goldman Sachs (the 5th-largest US bank) has much to account for: Manipulation of physical supply and demand in the commodities and foodstuffs markets; the sale of toxic subprime mortgages and the illegal expulsion of occupants from their homes after foreclosures; the falsification of Greek public accounts before Greece’s entry into the Eurozone. Goldman Sachs is currently the subject of investigation for fraud by the Securities and Exchange Commission (SEC) concerning Abacus 2007-AC1, a synthetic structured product sold by Goldman Sachs in 2007. According to the SEC, Goldman Sachs lied to customers concerning the part played by the Paulson & Co hedge fund in the product. The bank claimed the fund was itself a purchaser, whereas in fact it positioned itself against the product. The buyers’ losses were considerable and comparable to the profits shared by Goldman Sachs and Paulson & Co. [23] Goldman Sachs is renowned for its capacity to infiltrate the highest levels of political office in the US, Europe and elsewhere. JPMorgan (the biggest bank in the US) paid a $2.6 billion fine in January 2014 to avoid being found guilty by a court in the Madoff affair. Bernard Madoff was a Wall Street shark sentenced to 150 years in prison (the maximum sentence) in 2009 for running a Ponzi scheme that lost more than $50 billion of his customers’ money. The authorities have proof that JPMorgan, Madoff’s bank, had had serious doubts about his trustworthiness since 1994 but didn’t inform them until after Madoff was arrested. [24] JPMorgan is accused of retaining the information and of allowing Madoff to continue his lucrative activities without hindrance. During this time the bank perceived high commissions on his transactions, but refused to invest themselves. Another £500 million was paid to British authorities to avoid being convicted in a tax-evasion affair that involved accounts in the island of Jersey. JPMorgan is also accused of selling faulty derivatives to the Italian bank Monte dei Paschi in 2008 that caused such high losses that the Italian authorities had to provide bail-out facilities towards the end of 2012. It was JPMorgan that invented the first mortgage-backed structured products, in 1994. In 2013 the bank finally agreed to pay fines totalling $18 billion to various US authorities. JPMorgan is also subject to legal proceedings for manipulating CDSs and other derivatives on the London market in 2012. It is involved in the LIBOR scandal, the manipulation of foreign exchange markets, influencing the availability and prices of “physicals” on the commodities markets and illegal foreclosures and expulsions. The Impunity of the Banks must be Ended
Posted on: Thu, 25 Dec 2014 01:54:52 +0000
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