The fraud banks

A few years ago, I saw a movie called ‘The International’ which I thought was utterly stupid and waste of time. The movie did not have a character as a villain. The villain in the movie is an institution – a bank!

But the more I think about it and the increasingly nefarious activities that some of the big banks have been caught doing, the more I am convinced the banks are indeed the root of all evil in our society. To make matters worse, in a world where money is everything, the elected officials, our executive and judicial branches of governance are afraid to punish banks forall the evil they indulge in.

Here is a comprehensive list of wrong doings by banks and their consequences to society!

Goldman Sachs Bundled Bad Debt, Bet Against It and Won

Goldman was able to profit from the collapse in subprime mortgage bonds in the summer of 2007 by short-selling subprime mortgage-backed securities. Two Goldman traders, Michael Swenson and Josh Birnbaum, are credited with bearing responsibility for the firm's large profits during America's sub-prime mortgage crisis. The pair, members of goldman's structured products group in New York, made a profit of $4 billion by "betting" on a collapse in the sub-prime market, and shorting mortgage-related securities. By summer of 2007, they persuaded colleagues to see their point of view and talked around skeptical risk management executives. The firm initially avoided large subprime writedowns, and achieved a net profit due to significant losses on non-prime securitized loans being offset by gains on short mortgage positions.

HSBC Money Laundering

HSBC acknowledged compliance lapses, including a failure to maintain effective anti-money laundering program, and conducting transactions on behalf of customers in Burma, Cuba, Iran, Libya and Sudan, which were all subject to US sanctions.

HSBC punishment included a $1.26bn forfeiture and $665m in civil fines. 

Libor Scandal

The Libor scandal was a series of fraudulent actions connected to the Libor (London Interbank Offered Rate) and also the resulting investigation and reaction. The Libor is an average interest rate calculated through submissions of interest rates by major banks in London. The scandal arose when it was discovered that banks were falsely inflating or deflating their rates so as to profit from trades, or to give the impression that they were more creditworthy than they were

On 27 June 2012, Barclays Bank was fined $200 million by the Commodity Futures Trading Commission, $160 million by the United States Department of Justice