HSBC Banking Leak Shows Tax Avoidance, Dealings With Criminals 129
An anonymous reader writes: Data in a massive cache of leaked secret bank account files lift the lid on questionable practices at a subsidiary of one of the world's biggest financial institutions. HSBC's Swiss banking arm did the following: Routinely allowed clients to withdraw bricks of cash, often in foreign currencies of little use in Switzerland; Aggressively marketed schemes likely to enable wealthy clients to avoid European taxes; Colluded with some clients to conceal undeclared "black" accounts from their domestic tax authorities; and provided accounts to international criminals, corrupt businessmen and other high-risk individuals. For its part, HSBC admits that it is liable for past transgressions but claims its practices have changed.
Questionable banking? (Score:5, Insightful)
In other news some of the users of the pirate bay were found to be distributing copyrighted material. Also the sun found to be yellow.
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This is what neutrality looks like. It's not supposed to be any of the bank's business how its clients make or spend their money.
Do you want your bank asking you questions about this stuff?
Re: Questionable banking? (Score:1)
Dood RTFA. Or even just the summary. HSBC was marketing products that allowed them to do the dodgy...
Re: Questionable banking? (Score:4, Insightful)
when I was in grade school i was pretty damn sure earth like planets were very common. There had to be countless quadrillions of them at a minimum. It's actually a pretty obvious assumption. But a surprising number of people, given a total lack of evidence at the time of other planets outside our solar system, told me there were none at all. Whenever you have such large systems it isn't really a stretch to take evidence you have from a small sample and extend it to the whole - true it's not proof but you can't rule it out and pretty much by definition is plausible.
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I actually read it yesterday on another site it's kind of older news. Does it really suprise anyone? All those billions of dollars are from only 10k accounts so the % of shady customers probably is reaching 100.
Perhaps % of shady accounts, not customers?
There are reporting requirements in some places (don't know if it applies here) that kick in around 10k, so if I wanted to avoid attention and had that sort of money, I'd put it into a lot of little accounts, and pay someone some money to manage them all like they're one big account.
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The average account size is 2.5 to 10 million dollars. It's a we hide your identity and ask no questions banking system. Outside of that they offer no special perks. How many people would chose to bank half way around the earth for no reason? What does your gut say?
That I wish I had one? :)
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All those billions of dollars are from only 10k accounts so the % of shady customers probably is reaching 100.
The leak actually concerns 106k accounts from 203 countries and totalling 180 billion euros [lemonde.fr] (strangely the BBC claims only $118bn), with half of them actively trying to evade taxes (accounts in tax havens) and the rest at least hiding money. That said not all of them are really shady: there are really a number of accounts that the current holders inherited and never got the courage to declare to their country's revenue service. But if you know what percentage of the accounts that is you're better informed t
Re:Questionable banking? (Score:4, Funny)
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G2 on the stellar classification as I recall. Not hot enough to be white. Too hot to be orange. Yellow seems a good enough label.
Re:Questionable banking? (Score:4, Interesting)
Re:Questionable banking? (Score:5, Insightful)
So shady characters were using Swiss bank accounts? Really?
Laws are for poor people.
Don't believe it? Well, have you seen a single arrest of any HSBC employee for doing any of this? A single arrest for any of the customers who where committing these crimes? And even if you did see an arrest, do you really think they'll get convicted? Actually do any prison time?
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Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows
Everybody knows that the boat is leaking
Everybody knows that the captain lied
Everybody got this broken feeling
Like their father or their dog just died
Re:Questionable banking? (Score:4, Informative)
We essentially have a class of people above the law.
However, Kayne West jumped on stage again at the Grammys so we need to pay attention to that, first...
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Laws are for poor people.
Don't believe it? Well, have you seen a single arrest of any HSBC employee for doing any of this? A single arrest for any of the customers who where committing these crimes? And even if you did see an arrest, do you really think they'll get convicted? Actually do any prison time?
More specifically, laws are to prevent the poor (who greatly outnumber the rich) from pillaging the rich.
All is not lost. It has remained this way for centuries. Every once in a while, a revolution comes along which supplants the power structure with some new nobles.
The new rich invariably concern themselves with protecting their money from the poor. The King is dead. Long live the King.
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All the while the basic assumption - that some have the right to more than others - remains unchallenged. It'll be interesting to see whether it can be overthrown before weapons of mass destruction beyond mere bombs will trickle down into common hands. 3D printing the parts for a home laboratory to assemble your homebrewn airborne Ebola strain isn
Re:Questionable banking? (Score:5, Interesting)
A BBC new site article yesterday had this passage...
The bank now faces criminal investigations in the US, France, Belgium and Argentina. HSBC said it is "co-operating with relevant authorities". But in the UK, where the bank is based, no such action has been taken.
Whether anything happens as a result of those investigations remains to be seen. And in case you're wondering why there is no such action taken in the UK, the reason can be inferred from the next paragraph...
The man in charge of HSBC at the time, Stephen Green, was made a Conservative peer and appointed to the government.
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> Laws are for poor people.
It's not so much that, but that breaking the law is necessary in order to accumulate great wealth, and in fact to conduct operations in a general business environment where profits are obtained. The law then becomes a stupid, sick game, and the poor and middle class end up losing most of the time.
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It gets worse, HMRC basically let everybody off, they were asked to pay 10% of the tax owed and gave immunity from prosecution. The guy runnning HSBC at the time was made a gov't minister.
Someone from HMRC should be fired at the very least, the action gives a very clear signal that it is OK to hide your money abroad in order to avoid tax.
Conservative party, government of the people, by the millionaires, for the billionaires.
http://www.theguardian.com/bus... [theguardian.com]
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What is a brick of cash, anyway?
Something you needn't concern yourself with. (If you were rich, you'd know.)
And in other news... (Score:1)
Water is wet. Dirt makes you dirty. Cows go "moo" and Dogs go "woof".
Meanwhile Apple stores massive reserves of cash offshore. Simultaneously taking out a loan to pay its taxes... And why you ask per say? Because when you lend money to pay the IRS you get tax breaks.
They all do it. We all let them do it and only get off our collective asses to protest when the Govt hits us with a 50c surcharge on "whateverthefark".
HSBC Banking Leak Shows Tax Avoidance, Dealings Wi (Score:5, Insightful)
HSBC Banking Leak Shows Tax Avoidance, Dealings With Criminals
In other words, just another day of business as usual...
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The article title is bunk. HSBC did both tax avoidance and tax evasion scheme4s.
Re:HSBC Banking Leak Shows Tax Avoidance, Dealings (Score:5, Insightful)
Many people go so far as to consider taxation theft, and avoidance patriotic.
IOW, many people are self-centred twats.
BTW, I live in a country with one of the highest rates of taxation on the planet (Sweden), and my taxes actually *decreased* a couple of years ago--in the same year that I received a bonus that should otherwise have resulted in me paying about 10% *more*.
So much for your entertaining little theory Which is, as I said, entertaining, but not even worthy of modding down.
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It's smart to minimise one's tax obligations. Portraying it as some sort of sacred duty is a bit over the top, though.
Re:HSBC Banking Leak Shows Tax Avoidance, Dealings (Score:5, Funny)
People should always be trying to avoid taxes. Blindly paying whatever taxes are assessed is foolish and will always lead to the levying of more and more taxes because due to greed and human nature. Governments are incapable of ever lowering taxes in any real or meaningful way. The only way to avoid runaway taxation is perpetual tax avoidance. Many people go so far as to consider taxation theft, and avoidance patriotic.
As I get older, it becomes easier to understand why most revolutions start with hanging a bunch of the rich and powerful from lampposts.
Re: HSBC Banking Leak Shows Tax Avoidance, Dealing (Score:1)
Yeah because people feed themselves with jobs and capital.
Kill yourself.
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I mean this was suppose to be the #1 bank for money laundering- they could at least make is a smoother process.
HSBC was laundering money for drug cartels (Score:2, Interesting)
In the US decade or so ago. They are a blatant and repeat offender. Their main profits come from servicing organized crime and criminals, and should have been shut down years ago.
Re: HSBC was laundering money for drug cartels (Score:4, Insightful)
So revoke their banking licence and freeze all funds. Make everyone claim funds against a full disclosure.
Re:HSBC was laundering money for drug cartels (Score:5, Informative)
HSBC was FOUNDED on the ORIGINAL Silk Road. That heroin highway that ran through the Far East and extended tendrils through Hong Kong, Shanghai (hence the name) and London, Paris, Berlin and Rome.
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You realize that the original silk road was founded on trade in legal products, right? Like... silk?
Re:HSBC was laundering money for drug cartels (Score:5, Interesting)
yes, and diamorphine, too.
Back when opium dens were to be found next door to the Old Bailey and off the reception atria of every barrister in London. Often in the same building, too - occasionally you'd even find a room full of very young girls (or boys, if that was your poison). It all came in on the East India Company Docks. Where CANARY WHARF now stands.
Funny, that.
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yes, and diamorphine, too.
Back when opium dens were to be found next door to the Old Bailey and off the reception atria of every barrister in London. Often in the same building, too - occasionally you'd even find a room full of very young girls (or boys, if that was your poison). It all came in on the East India Company Docks. Where CANARY WHARF now stands.
Funny, that.
Thus, not over the silk road, which was a trans-Asian caravan route.
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You do realize that the original silk road was a land route through Asia, right? And that the European trade route by sea was a way AROUND the silk road because they were tired of the Turks dominating it?
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...Shanghai (hence the name)...
*snort*
"Shanghai" means "on the ocean". The rest of your assertions are also highly suspect.
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HSBC: Hong Kong and Shanghai Banking Company.
Fuck me, do I have to spell it out for you??
Punishment? (Score:1)
A fine, no more.
Avoiding versus evading (Score:5, Insightful)
If the bank is helping clients to avoid paying taxes, then the bank is to be congratulated for providing good sound business advice to their clients and enabling them to take advantage of tax situations set up on purpose by various taxing districts in order to lure business to their jurisdiction. If they are helping clients to evade taxes, then they need to be thrown in jail along with their clients.
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Avoiding is not illegal. Evading is illegal.
Bill Clinton: "I did not evade tax with that woman! . . . I just avoided it . . . a bit . . ."
Re: Avoiding versus evading (Score:2, Interesting)
The bit where it classifies them as "undeclared" "black" accounts means _evasion_. But I wont ruin the idealistic dream that a difference even really exists. HSBC is too big to fail remember. So lets see the account holders pass the buck because the bank advised it. And they can't really penalize the bank because as seen on numerious occasions they are above the law.
No it doesn't (Score:1)
Having capital abroad is not a crime, its only _evasion_ if they didn't pay tax on the generated income that made that money.
If they could simply classify someone as 'guilty', then they would have classified the people on the list as 'guilty' and thus avoided the messy thing of going to court. It's noticeable that only a few have paid extra tax as a result, and many only on the tiny interest on the bank account, because the money was earned and tax, and sticking it in a bank account is not a crime.... yet.
H
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Tax evasion is a crime in the US and the EU. Yes HSBC are obliged to collect tax on EU citizens with Swiss banking accounts per a treaty between Switzerland and the EU.
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The US congress keeps wanting to make "repatriation holidays" as well that would mean, once again, a huge tax giveaway to multinationals.
Our society is in deep shit.
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Ah but you see the title is bogus and the fact is HSBC had both tax avoidance and tax evasion products. e.g. the EU has an agreement with Switzerland where Swiss banks are supposed to collect taxes on the bank accounts of EU citizens and pass them on. They weren't doing it. The operation was illegal.
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That's what I always thought but here in New Zealand, avoiding tax is also illegal. Any mechanism designed solely to reduce one's legal tax liability is considered to be unlawful avoidance of tax and punishable as such.
Don't you love the way that governments put the collection of taxes above all else -- giving the IRS and their equivalent more power than any other arm of the state.
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That's what I always thought but here in New Zealand, avoiding tax is also illegal.
So if you were to buy a home and deduct the mortgage interest rather than renting a home, they throw you in jail? That is what avoiding taxes is, taking advantage of the programs put in place by the government to encourage citizens to partake (or to not partake) in an activity. Some taxing districts offer incentives to lure businesses to do business in their district. How can somebody be punished for partaking in what was legally offered to them by a legal entity?
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And if your that wealthy you can throw lawyers at debating the issue in court until it eventually goes away.
Theyre not alone (Score:5, Informative)
Bank of America, Citi and Deutsche Bank have all been implicated in laundering funds.
http://www.ibtimes.com/citi-de... [ibtimes.com]
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funnily enough, Citi own the other tall building that isn't Canary Wharf Tower (AKA Canary Wharf Group) or HSBC UK HQ on the Wharf... lowrises include Morgan Stanley, Barclays, Reuters news agency, Waitrose, Jamie Oliver's Kitchen, and the Financial Conduct Authority hidden away in the middle there somewhere... influence much?
(that has to be the most money-dense twenty acres on the entire fucking planet).
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I'm surprised they've not draped a large banner to The Great God Mammon down the side of the Canary Wharf tower yet, although undereath the Reuters ticker would work too, I guess.
It's pretty much what those obelisks are raised to.
Proportionality (Score:5, Insightful)
Not to defend Ross Ulbricht, but given what's coming to light, does anybody really doubt that HSBC enabled more drug trafficking than a dozen Silk Roads? And that's not even counting things like the arms trade and tax evasion.
Steal ten thousand dollars and you go to jail for decades. Steal ten billion and you get a slap on the wrist and an engraved invitation to the next campaign fundraising dinner.
Re:Proportionality (Score:5, Insightful)
Steal ten thousand dollars and you go to jail for decades. Steal ten billion and you get a slap on the wrist and an engraved invitation to the next campaign fundraising dinner.
This is unfortunately the nature of the world. I am afraid the only moral is go big or go home. There is another eerily similar adage about banking. "Borrow a hundred thousand you can't pay back and you have a problem, borrow 100 million you can't pay back and they have a problem." Although you have to adjust the sums for inflation somewhat the basic principle is: rules are only for the little guy.
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HSBC ran the original Silk Road. It actually moved silk and opium. HSBC's fortune was made on opium.
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To this day. A deeper investigation is needed into the Afghanistan opium war. The Taliban had nearly cut off the flow in 2001 [bbc.co.uk]. The following year it was business as usual.
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go beyond the BBC, and you'll find that not only had the Taliban throttled opium, they'd actually gotten farmers around to the shocking idea of growing food crops.
Now, if that's not evil and despotic, you tell me what is?
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the bastards!
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Steal ten thousand dollars and you go to jail for decades. Steal ten billion and you get a slap on the wrist and an engraved invitation to the next campaign fundraising dinner.
Well, not _always_... http://en.wikipedia.org/wiki/B... [wikipedia.org]
Bernie's problem was he stole from the wrong people. If he'd stolen from normal people he'd have gotten off, but he mostly stole from the 1%... that's no allowed in those circles.
Changed? (Score:1)
I thought they said that the last time they were caught doing this.
Remember, kids.. (Score:5, Insightful)
It's only illegal if you get caught. Even if you DO get caught, remember that rich people don't go to jail.
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These files were stolen by a disgruntled employee and sold to various governments.
That's not an undisputed fact. It is the version of the story supported by Swiss authorities and banks. In his own version, mostly supported by some French officials [icij.org], he claims that he never asked for any money and that he first contacted the authorities of Switzerland and of other countries, and decided to leak the data when they ignored him.
Re:Remember, kids.. (Score:4, Funny)
Are you stalking me or what?
Prison Time (Score:4, Insightful)
I bet not one of these bankers does any non-neglible prison time.
Re:Prison Time (Score:5, Insightful)
Of course not. Because they're essentially protected by the corporate veil.
So they can do all sorts of malfeasance, and HSBC will say "ooops, sorry", and possibly pay some fines. If they get sacked, they'll still keep their huge bonuses and severance.
The problem with corporations is it more or less encourages people to break the law, since they end up bearing no legal responsibility.
Rich bankers do prison time for ripping people off? Don't make me laugh.
Not a single one of the assholes who ripped off the world leading up to 2008 was charged with anything, despite essentially running an enormous Ponzi scheme to foist off bad debt to other people and make it look like it was AAA rated debt. It was theft, writ large, but not ONE of them was charged.
Because those people advise the government of financial matters.
Being a banker is practically a license to commit fraud on a massive scale, with no personal liability.
Being a banker on a large scale probably means some of the politicians who are supposed to be fixing this probably have an account with you and will give you a wink.
Because the politicians are just as corrupt as the bankers. All of these millionaire politicians are hiding their money in offshore accounts, right along with the drug cartels.
Re:Prison Time (Score:5, Insightful)
> problem with corporations is it more or less encourages people to break the law, since they end up bearing no legal responsibility.
I know to the guy on the street this seems irrelevant, but this is a major, major issue. It also is backed up by one of the worst pieces of doublethink that you have to believe in corporate culture.
CEO pay is through the roof, and in the US it's always "justified" by the amount of responsibility a CEO supposedly has in a company. However, every time there is a huge case of corporate malfeasance the CEO always claims that he/she had no knowledge of the lawbreaking. So which one is it: does the CEO take responsibility for the company or not?
The best example I know of this in modern life is Rick Scott. He was the CEO of a company that perpetrated the largest fraud in Medicare history. However (at least in the minds of the pro-corporate masses) he didn't even get a scratch on his reputation, let alone get indited for anything. It takes too many mental gymnastics for me to believe that his company's Medicare fraud did not personally enrich him.
To me this seems to be one of the worst societal problems we have to deal with right now. However no one even talks about it.
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The biggest lie perpetuated on the world is that corporations are there for any other reason than greed, and that collectively "the market" will arrive at optimal outcomes.
Corporations will always lie, cheat, and steal to make more money -- and they don't give a crap about us.
And many many politicians start out owning corporations, and are likely already quite corrupt before they even
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Another big myth is that the ideas you point out above, while accurate, are somehow handed down from god and not changeable.
The history of the US corporation is a sorted affair, and in the beginning the country actually put limits in corporate charters to keep corporations under control for the very reasons you describe. The corporation isn't some god given construct, it is actually a creature of the state. What we see right now is what happens when the society refuses to regulate it.
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It's also what happens when you have lawmakers (who profit from this stuff) removing regulation under the absurd notion that regulating corporations is somehow unfair to them.
Look at who is actively preventing companies from being regulated, or dismantling existing ones ... they're the people who are essentially trying to legalize theft on a massive scale. And they keep lying to us and say that we benefit from that.
Because they'r
"... its practices have changed." (Score:3)
Lessee, what might they mean by this? I'm guessing that they set up a committee to review their data-security methods, and have modified them to make it more difficult for the "authorities" to get at the information.
As with political campaigns, when a business uses the word "change" without being specific, you should generally assume that the change will not be to your advantage.
I wonder if any journalist has good information on just what the supposed changes have been. But I wouldn't bet on anything, since it's routine for the PR folks to just make up things that they'd like the journalists to publish.
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They installed a copy of Microsoft "Security Essentials" on the main server. It's all fixed/
that big building they occupy in London (Score:4, Funny)
can take care of the the entire homeless problem. Let's start with seizing that.
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who modded this funny? I was being serious.
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and more and bigger guns and better trained marksmen than Boris Johnson's private army.
When Government is so afraid of its people that it feels the need not only to disarm them, but to arm itself against an UNARMED foe, there is something SERIOUSLY FUCKED UP about the situation.
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funny, according to this http://virtualglobetrotting.co... [virtualglobetrotting.com] his Swiss home is in Féchy.
And according to his biography "Starman" by Paul Trynka, Bowie hasn't lived in Switzerland since 1976. In fact he's spent most of his time between touring, in New York, London and Hamburg.
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Phil Collins held money in a swiss bank account. What a crook! Where does Phil Collins live? Oh right. Launsanne SWITZERLAND.And OMG, David Bowie had a bank account in Switzerland.... where he lives.
I'm not going to defend the rich musicians claiming to reside in tax advantageous locations (cough [oecd.org]*Isle of Man*cough [taxhavensguide.com]). Nor am I going to defend those who advocate revolution (wait till you see what the regime is trying to repress) and failed to study history (hint: France had three revolutions, technically 5) - and I'm definitely not going to defend those that complain from the comfort of their armchairs:-
Swiss Bank Accounts (Score:2)
If you don't like what HSBC is doing, you should get an account with a Swiss bank because Swiss Bank Accounts are not subject to... wait a second.
Regulations? (Score:3, Insightful)
The Sarbanes-Oxley act has been on the books since 2002. Dodd-Frank bill since 2010. So are they working to keep companies in check and increase transparency? Or just costing both the government and the companies it affects a bunch of time and money? On one side you can say this activity was finally caught. On the other hand you have to ask when large banks are subject to regular audits how do they get away with it from year to year?
From my own limited personal experience, the only thing I can say for sure is that those audits are usually pretty terrible. In theory they're looking for the right stuff, but the auditors themselves are usually green accountants who often lack the hybrid blend of accounting, technical, and IT skills needed to any proper analysis. They don't understand what they're looking at and don't know what to ask for. They usually just follow a sheet of instructions line by line and check those boxes to indicate their work is done. I don't think that quite captures the spirit of those laws.
excuse me... (Score:3)
...I'll go get my wrist slapper and this will all be taken care of right now.
Hey hey hey! (Score:2)
Let's not be hasty now...
In the USA (Score:2)
Actually a UK bank (Score:3)
The data comes from the Swiss subsidiary, but HSBC is actually a British bank. And you have to love this bit from TFA:
"The man in charge of HSBC at the time, Stephen Green, was made a Conservative peer and appointed to the government. Lord Green was made a minister eight months after HMRC had been given the leaked documents from his bank. He served as a minister of trade and investment until 2013."
The little fish will be prosecuted, while the big fish are made peers of the realm. Business as usual for all of the big banks.
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Remember the News of the World phone hacking scandal? [wikipedia.org] Cameron appointed Andy Coulson [wikipedia.org], former News of the World editor, to be his official Press Secretary. Coulson was eventually sentenced to 18 months in jail for conspiracy.
Do you think that anything has really changed since then with any Murdoch new organization? Of course it hasn't. They are just more careful about not getting caugh
Belgian TV responds with satire clip (Score:1)
Just ingore Dutch article, or translate with browser.
Click movie, starts of in german, english from 0m30s.
http://newsmonkey.be/article/3... [newsmonkey.be]
Enjoy.
Sounds like HSBC hired a bunch of .... (Score:2)
The corruption is strong in that party. Oddly, they still come up wtih good ideas on how to accomplish such illegal actions.
Chiemgauer (Score:1)
http://en.wikipedia.org/wiki/C... [wikipedia.org] should fix it
HSBC or CH? (Score:2)
This doesn't seem to be HSBC particularly - rather just the way banking is (and has been) done in Switzerland.
So long as the world has corrupt wealthy people, there will be countries who will be willing to help them hide their wealth...for a fee of course.
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Davos is just on letter from being "Davros."
Think about it, won't you?