Looks a bit of a stretch to me

The families of people murdered by Mexican drugs gangs are suing HSBC, arguing the bank can be linked to the killings because it failed to stop cartels laundering the proceeds of their crimes, amounting to billions of dollars.

At the time of a regulatory investigation HSBC apologised for the failings and paid almost $2bn to the US authorities in 2012 to settle allegations that it did not properly implement anti-money laundering rules.

Because there’s a bit of a leap there. HSBC was not proven to have laundered Mexican drug money. It was proven not to have followed the rules that would enable it to prove that it had not handled Mexican drug money. Which is, as neoliberal sophists will note, something rather different.

25 thoughts on “Looks a bit of a stretch to me”

  1. So Much For Subtlety

    HSBC are a faceless multinational. The tearful orphans and widows of drug gangs are very real. If they can get this in front of a jury I don’t hold out much hope for the bank.

    Juries are like that. John Edwards made an entire career of this sort of thing.

    Meanwhile I expect Dave will be along to accuse them of anti-semitism in three, two, one …..

  2. Wouldn’t the families be better off suing the USA for failing to stop its citizens hoovering up charlie by the ton?

  3. They should also sue the Fedscum for “Fast and Furious” where guns were shipped to Mex cartels in an attempt to smear ordinary American gun owners as being the source.

    For which both Eric Holder and The Teleprompter Queen should be in one of their own super-max hellholes.

  4. What this boils down to is a people who, collectively, cannot organise themselves to produce anything other than a failed state looking for a foreigner to shoulder the blame.

  5. So Much For Subtlety

    Tim Newman – “What this boils down to is a people who, collectively, cannot organise themselves to produce anything other than a failed state looking for a foreigner to shoulder the blame.”

    I read an Australian writing about what he called the Ali Baba Economy. In the old days, people worked away for years, saving up a little every month, until they had a nest egg to leave the children. Now we live in the Ali Baba Economy where people hope to hit it lucky, find a magic lamp, give it a rub and be showered with billions.

    Usually the magic lamp takes the form of a lawyer.

    The Mexicans are no different from a lot of Americans these days. British people too.

  6. TN: Mexico is –like all the rest–a failed state. In the sense that the state is a pile of reeking, parasitical shite dumped on all human aspiration and endeavour, all states are failures. From the point of view of everyone save the gangsters who run the states and their foul leftist allies.

    Mexico itself is not that bad a place overall. And certainly not the dusty shit-hole filled with sweaty criminals that the movies show.

    That there are parasites in Mexico–egged on by lawdogs–is not a condemnation of the entire place. Do you think if circs were aligned so that UK parasites and law-dogs would not be at the same game?

  7. That there are parasites in Mexico–egged on by lawdogs–is not a condemnation of the entire place. Do you think if circs were aligned so that UK parasites and law-dogs would not be at the same game?

    They would, for sure. But shite though some parts of the UK are, it hasn’t yet reached the stage where government failure is so comprehensive that areas of the country are in open warfare, people are being killed…and the relatives of those killed think, rather than blaming their useless countrymen whose culture they share for the large part, that some foreign bank is to blame.

    I’ve long thought that in general, people deserve the mess (or otherwise) that they live in. There are a few examples of a mess being wholly imposed by outsiders – the Soviets running the Baltic states springs to mind – but in general places are shitholes because of the people living in them. Sure, those affected by the gang wars in Mexico might want change but I bet they’d be out in force to protest – which half the country was – if somebody half-suggested opening up their offshore reserves to break the PEMEX monopoly which bankrolls the government and allows them to continue with the mental polices which plague the place. I remember the protests about how allowing functioning companies like ExxonMobil would mean surrender of the country to the Imperialist Yanquis. Fine. But don’t go whining when drug gangs start murdering your countrymen in force and the army and police has been thoroughly infiltrated: it’s the same side of the same coin, i.e. useless, feckless, government which the population puts up with because, on half the issues, they support this behaviour to the hilt. It’s cultural, in other words. They have their culture, good. But don’t expect others to pick up the bill for the damage that culture does.

  8. TN:Fedscum drug prohibition is the cause of most of the trouble in the North of Mexico. The entire country is not convulsed with a drug war. I am not suggesting there is the slightest justice in the lawyers claims.

    That stupid ideas are rife in Mex is certain. But that is true everywhere. If put to it half the population of this country would support stupid statism/socialism in one area or another.

    Mex cops are bad news all round–but that is increasingly true of the US and –on a lesser scale–the UK.

    Mexican culture is slack about some things that we would probably not appreciate. But is generally more easy-going in other areas we would appreciate. There is little of the zeal for dictating every aspect of your life found over here for example.

    I agree with you that culture does affect the quality of life in countries. Russian gangsterism–a culture fostered by socialism–is bad news. And the shitty nature of the Mid-East (Israel excluded) is a direct result of our dear friends in the RoP.

    But Mexican culture–altho very dodgy in places–is not that bad. Most of the country is not a war zone and peoples heads being cut off is not a daily event.

    .

  9. Didn’t the FBI run guns to Mexican gangs? I remember rumours of some scandal a few years back, but as Obama was in charge no one reported it. The U.S. Government would be a ‘better’ target then HSBC.

  10. Rob–Search on “Operation Fast and Furious”.

    An attempt to smear ordinary gun owners/dealers as a source of guns which were actually supplied to the drug gangs by the Fedscum.

  11. I’ve thought before that instead of HSBC drama-queening about leaving the UK it might be wiser to pull out of the US – and so might many other companies. Presumably Volkswagen are about to be BP’d.

  12. “Wouldn’t the families be better off suing the USA for failing to stop making its citizens criminals for hoovering up charlie by the ton?

    I can’t blame the ambulance chasers for jumping on the bandwagon. HBSC left themselves open for these kinds of attacks when they allowed money laundering to occur. Whether this specific case has merit is up to the court system to decide.

    What I can say for sure is that deaths in Mexico due the drug war wouldn’t have happened if there was no drug war. Alcohol prohibition had serious side effect which are almost exactly the same as what drug prohibition currently has. The best thing that could happen to South and Central America is an end to this unwinnable war. The drug market has proven that it is not going to be banned so it is time to relax the regulations.

  13. HBSC left themselves open for these kinds of attacks when they allowed money laundering to occur.

    You’ve succumbed to the meme. There was no evidence that HSBC allowed money laundering to occur. HSBC failed to keep the controls that US Fed insist are necessary to allow them (not the banks) to detect money laundering after the event.

    This is similar to the requirement for account opening, in the UK, to prove your identity and place of residence to a bank that has been sending you statements for other accounts to the same address for the last 15 years.

  14. Yes. Legalising drugs won’t solve every problem but it will probably stop gangs shooting each other or everyone else. You don’t see gangs machine-gunning Boots or Marks and Spencer in turf wars over prescription drugs or corduroy slacks.

  15. Mr Ecks,

    I agree, I’m not so much saying all of Mexico is a shithole as saying that whatever happens in Mexico is (largely: and I take your point about the insane US drug policy) the result of collective decisions made by Mexicans, and those decisions are largely driven by culture. If Mexico is to change, the culture needs to change, and that probably means you need a new population.

  16. SE I concede the point. I am not well versed in the details of HSBC’s settlement so I assumed that there was enough to substantiate the claim. Once again it is up to the court system to ensure the suit is valid.

  17. I could argue that our lawyers are simply using their influence in government to ensure there is a larger market for lawyers. The US legal market is being poorly manipulated by government creating this mess. It’s too bad that we sometimes need lawyers or we could get rid of them all.

  18. I have been to Mexico City. I was struck by how downright MIDDLE CLASS it is. Like Mr Ecks said, the movies gave me a false paradigm.

    Legalizing drugs is the cure. Drop the FDA and the DEA (hear me, Trump?). The cartels are driven by money. There is money in illicit drugs simply and only because they are illicit. Thanks, government.

    If guilt by association is allowed, where does the Catholic Church fit in? Remember, Latin America is almost exclusively Catholic. The Pope is from Latin America. The Church receives substantial income from drug money, as most/all cartel members are Catholic, and perforce contribute to the Church. Remember that if the Church takes a stand against legalizing drugs. If HSBC is guilty, RCC is guilty.

  19. …HSBC was not proven to have laundered Mexican drug money…
    An extract from the Senate Report:
    …HBMX engaged in many high risk activities. It opened accounts for high risk clients, including Mexican casas de cambios and U.S. money service businesses, such as Casa de Cambio Puebla and Sigue Corporation which later legal proceedings showed had been used on occasion, from 2005 to 2007 for Puebla and from 2003 to 2005 for Sigue, to launder funds from illegal drug sales in the United States. HMBX also offered high risk products, including providing U.S. dollar accounts in the Cayman Islands to nearly 50,000 clients with $2.1 billion in assets, many of which supplied no KYC information and some of which misused their accounts on behalf of a drug cartel. HBMX was also the single largest exporter of U.S. dollars to HBUS, transferring over $3 billion in 2007 and $4 billion in 2008, amounts that far outstripped larger Mexican banks and other HSBC affiliates. Mexican and U.S. law enforcement and regulatory authorities expressed concern that HBMX’s bulk cash shipments could reach that volume only if they included illegal drug proceeds that had been brought back to Mexico from the United States.

    That may not be sufficient from a criminal case, but I’d think it would stand up in a civil action.

  20. On occasion, many of, some of, could….
    So the only actual numbers are the ones HSBC would be declaring itself.
    Sounds like an awful lot of surmising & very little substance.
    xxxxxxxxxxxxxxxx I edited this a bit – Tim. Will explain it directly.

  21. So Much For Subtlety

    PaulB – “…HBMX engaged in many high risk activities. It opened accounts for high risk clients, including Mexican casas de cambios and U.S. money service businesses”

    So HSBC is going to be held responsible because they did business with banks and quasi-banks that did business with money launderers? That seems fair.

    “HBMX was also the single largest exporter of U.S. dollars to HBUS, transferring over $3 billion in 2007 and $4 billion in 2008”

    Oh wait, it is not HSBC, it is their Mexican subsidiary?

    “That may not be sufficient from a criminal case, but I’d think it would stand up in a civil action.”

    That is a stunning indictment of American law then

  22. Oh wait, it is not HSBC, it is their Mexican subsidiary
    You’re saying that a corporation should be above the law so long as it conducts its business through subsidiaries?

    Pace Tim W and SE, this was not just a case of carelessness with paperwork. International AML regulations have been established for decades, and compliance should have been a matter of routine at a major bank. HSBC chose to ignore the regulations, and even sacked their US head of compliance when she eventually raised her concerns with the board.

    If you’re shipping billions of dollars a year from Mexico to the US, no questions asked of your customers, do you think it likely that all that money is clean? Banks are supposed to ask themselves that sort of question.

  23. The particular inference being made is HSBC were laundering “drug money”. Perhaps it’s worth looking at why there may have been a lot of dollars cash floating around in Mexico.
    There’s no argument there’s a lot of Mexicans illegally in the US. They go there for economic reasons. And they’ll be wanting to send money home to Mexico to their dependents.
    Now, for an illegal, transmitting money back home is a problem. The banking system is pretty well closed to them because of those money laundering regulations everyone’s so keen on. Even if it wasn’t, anyone who’s had experience of doing small amount foreign transmissions will tell you it’s damned expensive. BarclaysUK recently quoted me a £25 minimum fee to do a transfer & a French bank’s much the same at €30 to clear a GBP108 cheque. i don’t suppose US banks are more helpful. And this presumes the recipients in Mexico have bank accounts. If they don’t, then someone will be charging them to use theirs.. There are cash at both ends transmission services. Which offer lousy exchange rates & steep charges. So any wetback sending a couple hundred bucks bacjk to feed los ninos is going to see a lot less value arriving back home in pesos Mexicano.
    So this isn’t what they do. They do what everybody else does in their situation. They get a friend or relative to take it back in dollar bills. And there’s no more problem spending dollars in Mexico than there is spending Euros in Romania. For the same reason. People really don’t care what they use as money as long as it buys things. Get enough of a currency in a country & it’s as much a medium of exchange as the domestic one. Except money tends to pool. As IanB pointed out on a thread, a while ago, money in circulation tends to collect with the rich. Because they’re the ones accumulate surplus. And in a country like Mexico, they’re the ones more likely to interface with a banking system. Want to exchange dollars for pesos And, again, in a country like Mexico, they’re also the ones more likely to want to avoid burdening the Mexican taxman with the onerous task of collecting any.
    So yes, there’s likely been money laundering going on. But you don’t need drug dealing to account for a lot of dollar cash in Mexico. Several million Mexicans working illegal in the US is quite sufficient.

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