Case in point: Justice Department says we’re going to prosecute you for all of the banking you did—probably badly—for the Iranians and the Mexican drug cartels, etc. But if we don’t prosecute you, we’re going to fine you a bunch of money and maybe prosecute some of your staff. HSBC countered with, “How about you don’t prosecute us or any of our staff?” And Justice said, “Deal.”
Quoting from internal Treasury records, the report said that once the Justice Department decided not to prosecute HSBC, its officials began softening the deal offered to the bank. One change involved releasing the bank’s employees, officers and directors from potential prosecution.
The original agreement provided no protection from prosecution for employees who “knowingly and willfully” processed financial transactions with countries under American sanctions, the report said.
But the final deferred prosecution agreement gave a conditional release from liability for transactions disclosed to investigators during the period covered by the settlement.
Further case in point: HSBC is apparently stilldoing all sorts of things covered by the deferred prosecution agreement (although it is doing them less), and promising to do them again in the future, and still doesn’t get prosecuted. Is this (and Switzerland) a great country, or what?
A Bank Too Big to Jail [NYT]