White Collar Crime 8-10-2016

10, August 2016                       White Collar Crime

Commit a minor infraction and the strong arm of the law will descend on you without mercy. Collude with other major financial institutions to manipulate interest rates and you suffer no jail time and pay a small fine relative to your assets.

The Libor corruption was one of the biggest financial scandals of all time.  A number of the largest banks in the world were caught manipulating world interests rates through the London Interbank Offered Rate (LIBOR) which impacted more than $300 trillion of financial products.

British banks, who often boast to be the bastions of probity, played a central role in the scandal which has severely tarnished their image.

Barclays paid $453 million settlement in England and a minuscule $100 million fine in the United States. None of the officers are serving prison time. The fines offer no deterrent and are merely the cost of doing a very lucrative business. 

Bank officials will escape personal fines and will merely pass on the settlement fees to their shareholders.

The damage that was done to municipalities, city and state pension funds was enormous.

The LIBOR settlement is similar to the HSBC scandal, where the bank walked away with a relatively small fine for laundering hundreds of millions of dollars for foreign drug cartels.