Swiss banks are turning over thousands of employee names to U.S. authorities as they seek leniency for their alleged role in helping American clients evade taxes, according to lawyers representing banking staff. At least five banks supplied e-mails and telephone records containing as many as 10,000 names to the U.S. Department of Justice, according to estimates by Douglas Hornung, a Geneva- based lawyer representing 40 current and former employees of HSBC Holdings’s Swiss unit, Credit Suisse, and Julius Baer Group Ltd. The data handover is illegal, said Alec Reymond, a former president of the Geneva Bar Association, who is representing two Credit Suisse staff members. “The banks are burning their own people to try and cut deals with the DOJ,” said Hornung. “This violation of personal privacy is unprecedented in the Swiss banking industry.” [Bloomberg]
Swiss Banks That Tasked Employees With Helping Clients Evade Taxes Are Saving Themselves By Turning In Said Employees, Muttering “I can’t believe you’d do something like that, don’t you know tax evasion is illegal” Loud Enough For Others To HearBy Bess Levin
Oh, the world. Go read Jeremy Grantham’s GMO quarterly letter; as always it’s pretty fun. Then go read this HSBC report that Paul Murphy wrote about on Alphaville. These are things you probably know already but are worth remembering. First, Grantham:
The central truth of the investment business is that investment behavior is driven by career risk. In the professional investment business we are all agents, managing other peoples’ money. The prime directive, as Keynes knew so well, is first and last to keep your job. To do this, he explained that you must never, ever be wrong on your own. To prevent this calamity, professional investors pay ruthless attention to what other investors in general are doing. The great majority “go with the flow,” either completely or partially. This creates herding, or momentum, which drives prices far above or far below fair price. There are many other inefficiencies in market pricing, but this is by far the largest. It explains the discrepancy between a remarkably volatile stock market and a remarkably stable GDP growth, together with an equally stable growth in “fair value” for the stock market. This difference is massive – two-thirds of the time annual GDP growth and annual change in the fair value of the market is within plus or minus a tiny 1% of its long-term trend. The market’s actual price – brought to us by the workings of wild and wooly individuals – is within plus or minus 19% two-thirds of the time. Thus, the market moves 19 times more than is justified by the underlying engines!
You probably knew that, though the numbers were new to me.* This though seemed like a useful breakdown: Read more »
Yeah, well. Apparently someone has been snacking between meals, and now there will be purges:
“There was a lot of talk about streamlining going on at the last strategy day, so I suppose this is a function of that,” one top 10 HSBC shareholder told Reuters. “It is a quite sprawling bank, and I wouldn’t be surprised if it has got a bit bloated here and there,” he said.
Sky News reports 10,000 cuts to save $3.5 billion. Many cuts will be in retail – shutting down 39 unprofitable markets, selling U.S. credit cards business, and shrinking U.S. retail. Read more »
As he’s got time on his hands and there’s something cathartic about letting it all out, Bernie Madoff’s been on a little media tour of late (which will culminate with an appearance on Jerry Springer in a paternity episode you don’t want to miss). His last stop was at New York, where Berns told reporter Steve Fishman it irks him that no one ever cares to mention that he “had a successful business and did wonderful things for the industry” during the so-called “legitimate years.” Most recently he sat down for a little chat with the Financial Times and in an interview that will run in the upcoming weekend edition, told the paper that UBS and HSBC are going to have “big problems” and that JPMorgan? Should run and hide.
“I am not a banker but I know that $100bn going in and out of a bank account is something that should alert you to something,” he said from federal prison in Butner, North Carolina. “JPMorgan got all the financial statements…JPMorgan doesn’t have a chance in hell of not coming up with a big settlement [with trustee Irving Picard, who filed a lawsuit against the bank.”
But enough about them. Let’s get back to Berns. Why did he do it? Apparently in the full interview, Bernie says it wasn’t about the money but rather that he was a people pleaser. Read more »
Are you a wealthy individual who hasn’t exactly paid taxes, per se, or as much as you should have, in quite some time? Did you do so via HSBC India, which set you up with some secret accounts? Did you think you were being pretty clever, not going with UBS, which would’ve been like sticking a sign on your back proclaiming “I owe the government millions in taxes and unpaid parking tickets”? The DOJ would like to let you know that time’s up, smart guy. Read more »
A couple weeks ago, we met Toby Carroll, a New Zealand-born real estate analyst for HSBC currently stationed in Dubai, who’d spent the last two months in prison. Carroll had ended up there after his ex-girlfriend, Priscilla Ferreira, found him and a new girl, Danielle Spencer, in his apartment and proceeded to start slashing curtains, furniture, etc, and go after the Danielle with a knife. The police were called and all three were put in jail.
Carroll has since been freed but faces charges of “sex outside marriage.” Last week his ex spoke, denying reports she had been dumped by Carroll a day before she caught him in bed with Spencer, and claiming they were going to get married. Today Spencer, who “lapdanced her way across the USA and Australia” before relocating to Abu Dhabi where she found work “in the property business,” has been good enough to add yet more color to the story. The new details include the fact that she was on her second and not first date with Toby when she went back to his place for “coffee,” a vivid description of being splayed out on her stomach when Priscilla jumped on top of her and why she didn’t fight back. Read more »
HSBC Analyst Who Had Knife Pulled On Him By Ex-Girlfriend, Was Jailed For Going On A Date With Another Woman Is Freed, Still Faces Charges, WrathBy Bess Levin
Last week we met Toby Carroll, a New Zealand-born real estate analyst for HSBC currently stationed in Dubai, who’d spent the last two months in prison. Carroll had ended up there after his ex-girlfriend, Priscilla Ferreira, found him and a new girl, Danielle Spencer, in his apartment and proceeded to start slashing curtains, furniture, etc, and go after the Danielle with a knife. The police were called and all three were put in jail because in Dubai, sex outside marriage is illegal.
Today brings word that Carroll, who friends describe as as “a fun-loving party boy who was dedicated to his job, a snappy dresser who liked women but wasn’t womanizer,” has been released from prison. So, that’s good news! Unfortunately, some other details seems to suggest things aren’t going to be so great for him in the near term. Read more »