The British HSBC Private Bank has been accused of facilitating money laundering and earned big profits handling secret accounts for arms dealers, dictators and blood diamond traffickers, according to materials released in February by the International Consortium of Investigative Journalists (ICIJ) from the non-governmental organization Transparency International. In recent years, in a number of cases relating to money laundering and tax evasion, criminal investigations into HSBC have been initiated by Argentine, Brazilian, Swiss and United States authorities. However, there has been no such investigation in the UK, where HSBC is headquartered and where it is the country’s biggest bank in terms of assets.
Journalists laid their hands on the first information about suspicious HSBC bank transactions in 2007 when Herve Falciani, a programmer formerly employed at HSBC’s Geneva office, stole their service database and handed it over to the French tax authorities and the French newspaper Le Monde; the latter, with the help of an ICIJ team of more than 140 highly qualified professionals from 40 countries of the world, conducted an analysis of the information they received, involving almost 110 thousand depositors from more than 200 states.
The journalists came to the conclusion that the British HSBC bank was actively helping its clients commit tax evasion and conceal financial transactions relating to illegal arms and drugs transactions, as well as diamonds smuggling. The preliminary information alone suggests that quite a few former and even active politicians from the UK, India, and African states, as well as members of royal families from Arab countries, were involved in criminal transactions for the total amount of $100 billion. This scandal with the Swiss Division clients of the British HSBC bank was then named “the Swiss Leaks.”
Recently, French law enforcement agencies also initiated an investigation into the British HSBC bank on suspicion of facilitating money laundering; they obliged the bank to provide financial collateral guarantees in the amount of one billion euros. In order to settle the investigation about money laundering, the British HSBC bank paid Swiss authorities a record-breaking fine of 40 million Swiss Francs ($43 million); in return, Geneva’s public prosecution office promised to close the investigation without publishing its results and prosecuting HSBC in court. However, they made it crystal clear to the bank that next time, should there be one, the case would not end with a “settlement.”
At the same time, one should not forget that in 2012, HSBC was already fined by the US authorities for $1.9 billion for not impeding the laundering of the money received from drug trade and arms sales.
In November 2014, influenced by a resonant critical reaction in many countries whose citizens were involved in laundering their multi-million funds through English banks, the UK Competition and Markets Authority was forced to announce the beginning of an investigation of the four biggest banks, regarding their attitude towards small businesses and natural person depositors. The following leading UK banks came under authorities’ scrutiny: HSBC, Barclays, Lloyds Banking Group, and RBS, which are currently associated with 77% of the United Kingdom natural persons’ accounts and 85% of small businesses’ accounts.
In February 2014, the Serious Fraud Office (SFO) named three former Barclays employees in connection with its investigation into the manipulation of LIBOR (the London inter-bank offered rate) and charged them for allegedly conspiring to commit fraud. The investigation of LIBOR rates was initiated in 2012, the same year Barclays became the first bank fined, in a related matter, by the British and US regulators for £290 million (around $450 million) in a pre-trial settlement.
In June 2014, the New York County District Attorney accused the British Barclays bank of violating auction rules, due to the fact that on its closed ground for securities trading, guaranteeing anonymity to all participants (named the “dark pool”), this bank provided privileges to so-called high-speed traders in the form of specialized computer systems, which allowed them to conduct tens of thousands of operations in a fraction of a second.
As a result of the Barclays bank scandal, its executive director, Anthony Jenkins, resigned at the beginning of July of this year, BBC announced.
Today, British civil society is living through a serious crisis that has affected all spheres of life, including banking. In the past 20–30 years, the Western nations, and above all the UK and the USA, have begun to neglect their function of financial regulator, allowing banks to carry out ever riskier operations. With the empty talk of Cameron’s present administration trying to distract the country from resolving the most pressing socio-economic problems, risky operations have become more frequent. In 2008, the bloated finance bubble burst, driving the world economy into a crisis. However, against the background of the sluggishness in financial regulation and lack of concern with the financial oligarchy’s continued self-enrichment demonstrated by Washington and London, new crises are coming and we shall all witness them very soon. We can also expect a collapse of financial systems in a number of countries, for the downfall of which, similarly to that of Greece, many US and UK banks are to blame.
Vladimir Platov, an expert on the Middle East, exclusively for the online magazine “New Eastern Outlook” .
