Yes, but compliance officers can be conveniently held responsible. Why would you fire a potential scapegoat? Naturally, compliance officer's are by nature risk averse and apply CYA approach liberally.
whenever there's a leak regarding banking institutions these bank names keep coming up. its been happening for years. is anything actually done about it? do they get fined?
No, because they're "too big to fail". And in the rare case that the hammer is actually brought down, it usually falls on a patsy "rogue employee", despite a corporate culture and wilful blindness that enables this behaviour.
Granted, SARs get a little special since banks ( even internally ) are very tight-lipped about what SAR processing for legal reasons. So depending on the team, accounts may be investigated further as the situation warrants, but it was not a requirement of any kind as the article seems to suggest ( though it is phrased carefully enough to avoid saying that ).
Having said all that, I don't know if it is true at all banks, but you would not believe the wrangling needed to close an account. The times I saw it happened, it tended to be a clear case of fraud against the bank in individual cases, and some major issue with business accounts ( commonly now referred to as 'derisking' ). Normally, account officers, various VPs will fight tooth and nail to keep their favorite customer in ( and they should, but I want the reader to understand the issue is not as simple as BBC made it seem ).
HSBC was busted in the early 2010s for enabling people to launder money. They were more recently fined by the US government for advising individuals on how to evade taxes. They have a history of questionable practices.
A history that dates back to its very origins, AFAIK they were first created to manage the piles of money generated from the opium sold by British into China
good advertising, everyone needs a bank that dgaf.
not because you want to do anything illegal, but because you don't want a bank afraid all your benign transactions are illegal and causes inconveniences to you
For these type of things, I think Singapore style caning would be very helpful. Basically, whenever there are violations like this, the CEO, the C-Suite, and all the board members get caned. Doesn't matter if it was some low-level employee that actually did it. They still get caned.
This nicely fixes the problem of too-big-to-fail since there are not bankruptcy level fines. It also aligns incentives since their ass is literally on the line.
It seems a lot of comments are pointing to HSBC while the bigger whale JP Morgan which moved $1bn is not mentioned in comments. HSBC is involved with $80 million fraud compared to JP Morgan which is involved over $1 billion fraud. Take Goldman Sachs paying billions in fine to Malayaisan government and still many investors in 1MDB still lost.
So probably people can take solace that person who defrauded $80 million is arrested and punished in China. But the person in JP Morgan and Goldman Sachs still at large and both the banks are doing very fine without fines by USA government.
27 comments
[ 3.9 ms ] story [ 67.9 ms ] threadI do wonder the true scale of the ineptitude and corrupt nature of their fraud department is.
https://www.workforcebulletin.com/2012/05/22/new-yorks-at-wi...
The mere presence of a compliance officer checks the box.
A compliance officer sounding an actual alarm can get them fired.
No, because they're "too big to fail". And in the rare case that the hammer is actually brought down, it usually falls on a patsy "rogue employee", despite a corporate culture and wilful blindness that enables this behaviour.
With the nation doing the fine thinking the corporation views them any differently from the last strongman
"But the reports failed to include key facts about customers, including the ultimate beneficial owners of accounts and where the money came from."
But in US beneficial owner's info was not required until recently ( https://www.fincen.gov/resources/statutes-and-regulations/cd... ; https://www.53.com/content/fifth-third/en/business-banking/m... ).
Granted, SARs get a little special since banks ( even internally ) are very tight-lipped about what SAR processing for legal reasons. So depending on the team, accounts may be investigated further as the situation warrants, but it was not a requirement of any kind as the article seems to suggest ( though it is phrased carefully enough to avoid saying that ).
Having said all that, I don't know if it is true at all banks, but you would not believe the wrangling needed to close an account. The times I saw it happened, it tended to be a clear case of fraud against the bank in individual cases, and some major issue with business accounts ( commonly now referred to as 'derisking' ). Normally, account officers, various VPs will fight tooth and nail to keep their favorite customer in ( and they should, but I want the reader to understand the issue is not as simple as BBC made it seem ).
not because you want to do anything illegal, but because you don't want a bank afraid all your benign transactions are illegal and causes inconveniences to you
This nicely fixes the problem of too-big-to-fail since there are not bankruptcy level fines. It also aligns incentives since their ass is literally on the line.
The problem seems to be that C-Suites are just not held responsible.
I don't know if they always should, as the argument is complex, but it seems the current state of affairs is just not good.
So probably people can take solace that person who defrauded $80 million is arrested and punished in China. But the person in JP Morgan and Goldman Sachs still at large and both the banks are doing very fine without fines by USA government.
https://news.ycombinator.com/item?id=24535241 (473 points/199 comments)
https://news.ycombinator.com/item?id=24535903 (129 points/16 comments)