Ever heard of HSBC? I’ll bet most haven’t, but it is one of the largest banks in the world. Founded in the 1860’s in Hong Kong (“HSBC” stands for Hongkong and Shanghai Banking Corporation) in part to finance the growing opium trade with China, the bank is currently headquartered in London (the bank fled Hong Kong when the Japanese arrived in 1941) and has offices and branches pretty much everywhere in the world.
It turns out that HSBC decided it could turn a tidy profit by money laundering for drug cartels and terrorist States/groups. The actions taken by HSBC in these efforts were pretty brazen and eventually they came to the attention of the United States government and legal action was started. And HSBC faced what amounted to a “death penalty”. The criminal activity was so pervasive that the criminal penalties would have demanded an end to HSBC’s activities in the United States and probably a bunch of other nations where it is alleged the “rule of law”is prevalent.
But, in the end, all HSBC got hit with was a $1.9 billion fine. Don’t get me wrong, that is a pretty hefty chunk of change, but with a market capitalization of nearly $196 billion, it is the merest chump change as far as HSBC is concerned. They’ll probably make it up by moving their money laundering operations to some backwater where US writ doesn’t run and just add a surcharge to the drug lord’s monthly fees. No directors of the firm were arrested or charged, nothing else is going to happen. A gigantic criminal enterprise which makes the mafia pale in comparison and all that happens is a fine. The likely reason they got off with a wrist slap? Taking down HSBC would have roiled the financial system with incalculable effects: it might have been something like a Lehman Brothers.