Workers Revolutionary Party

HSBC a repeat offender that will never change

IN September 2014 HSBC settled claims that it made false representations in selling mortgage bonds to the giant US mortgage companies Fannie Mae and Freddie Mac.

HSBC paid $550m to the US’s Federal Housing Finance Agency, which had filed 18 lawsuits.

The state of Virginia alleged the banks fraudulently misrepresented the quality of the mortgages they packaged up and sold to investors such as the Virginia Retirement System. According to the allegations, 40% of the mortgages sold on to the retirement fund had a higher risk of default than was disclosed at the time they were bought, leading to $383m of losses.

The 317-page lawsuit also named arms of Citigroup, Countrywide, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley, UBS and Washington Mutual.

‘Every Virginian was harmed by the financial crisis. Homes were lost, retirement accounts were devastated, small businesses saw their credit dry up almost overnight, and state and federal budget cuts hurt vulnerable Virginians,’ said Attorney General Mark Herring.

The banks, including HSBC, stamped on the working class and were at the centre of the 2008 crash!

HSBC however had many more irons in the fire. One of them was its Swiss division which was helping more than 100,000 wealthy individuals evade hundreds of millions of pounds worth of tax.

The accounts from 106,000 clients in 203 countries, were leaked by whistleblower Herve Falciani in 2007.

In Belgium, a judge is considering issuing international arrest warrants for directors of the Swiss division of the bank.

One of HSBC’s most senior figures, Stephen Green, who was made group chief executive in 2003 before going on to become the group executive chairman of the bank in 2006, was made a Tory-led coalition minister eight months after HMRC (HM Revenue and Customs) had been given the leaked documents from his bank in 2010. He served as a Tory minister of trade and investment until 2013.

Green has refused to comment on the massive tax evasions saying: ‘As a matter of principle I will not comment on the business of HSBC past or present.’

The bank now faces criminal investigations in the US, France, Belgium and Argentina, but not in the UK, where HSBC is based.

HSBC’s Swiss accounts had 106,000 clients involved with $118bn total assets held in Swiss accounts, with 11,235 clients from Switzerland holding $31.2bn, 9,187 clients from France holding $12.5bn, and 7,000 clients from the UK holding $21.7bn.

HM Revenue and Customs (HMRC) has identified 1,100 people from the list of 7,000 British clients who had not paid their taxes. Only one person has been prosecuted.

HSBC broke the law by actively helping its clients. The bank gave one wealthy family a foreign credit card so they could withdraw their undeclared cash at cash dispensers overseas. HSBC also helped clients stay ahead of the law.

The bank said it now puts compliance and tax transparency ahead of profitability.

Sue Shelley was the private bank’s head of compliance in Luxembourg. She said HSBC did not keep its promise to change. ‘I think the verbal messages were great but they weren’t put into practice and that disturbed me greatly.’ She was sacked after raising concerns. She has since won a tribunal hearing for unfair dismissal.

HSBC Private Bank (Suisse) continued to offer services to clients who had been unfavourably named by the United Nations, in court documents and in the media, as connected to arms trafficking, blood diamonds and bribery.

Its boss Stephen Green, Baron Green of Hurstpierpoint, was able to transfer from the bank right into the Tory government with ease.

Meanwhile the poor and beneft receivers are ruthlessly pursued and ‘brought to justice’ if they do not pay their taxes, or are thought to be practicing deception.

There will be no justice in the UK until it has a workers government and all of its banks are nationalised and under workers management.

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