Tuesday, July 8, 2014

The Prosecution of European Banks That Violated US Law Shifts To Germany

The US has been investigating the operations of European banks for over a decade.  In 2009 the British bank Lloyds struck an agreement for deferred prosecution.  That was followed by agreements with other major banks in Britain.  HSBC, Standard Chartered and Barclays also struck agreements on the violation US banking laws.  Credit Suisse, the largest bank in Switzerland, and ING a large bank in The Netherlands also accepted deferred prosecution agreements and paid substantial penalties.

The major banks in France have also been under investigation.  Credit Agricole and Societe Generale are under investigation and BNP Paribus agreed to a $8.9 billion penalty and a criminal charge.

The most recent investigation involves Germany's second largest bank Commerzbank.  It is subject to a $500 million penalty.

The European banks were using the NYC offices to funnel dollars on behalf of clients in Iran and Sudan in violation of sanctions imposed on those countries by the US.  The largest US bank Citigroup is also under investigation for laundering money through its Mexican subsidiary for a drug cartel.  JP Morgan Chase also agreed to a $2 billion penalty for aiding and abetting the Madoff Ponzi scheme.

The European and American banks cited in this article risked their reputations in the pursuit of easy profits.  Finding ways to get around US laws has been one of their strategic advantages.  This a sad commentary on the international banking industry.

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