Bl***y Banks Again

The video is very long, but the text gives basically the same info.




Something really strange appears to be happening. All over the globe, governments and big banks are acting as if they are anticipating an imminent financial collapse.

Unfortunately, we are not privy to the quiet conversations that are taking place in corporate boardrooms and in the halls of power in places such as Washington D.C. and London, so all we can do is try to make sense of all the clues that are all around us. Of course it is completely possible to misinterpret these clues, but sticking our heads in the sand is not going to do any good either. Last week, it was revealed that the U.S. government has been secretly directing five of the biggest banks in America "to develop plans for staving off collapse" for the last two years.

By itself, that wouldn't be that big of a deal. But when you add that piece to the dozens of other clues of imminent financial collapse, a very troubling picture begins to emerge. Over the past 12 months, hundreds of banking executives have been resigning, corporate insiders have been selling off enormous amounts of stock, and I have been personally told that a significant number of Wall Street bankers have been shopping for "prepper properties" in rural communities this summer.

Meanwhile, there have been reports that the U.S. government has been stockpiling food and ammunition, and Barack Obama has been signing a whole bunch of executive orders that would potentially be implemented in the event of a major meltdown of society. So what does all of this mean? It could mean something or it could mean nothing. What we do know is that a financial collapse is coming at some point. Over the past 40 years, the total amount of all debt in the United States has grown from about 2 trillion dollars to nearly 55 trillion dollars. That is a recipe for financial armageddon, and it is inevitable that this gigantic bubble of debt is going to burst at some point.

In normal times, the U.S. government does not tell major banks to "develop plans for staving off collapse".

But according to a recent Reuters article, that is apparently exactly what has been happening....

U.S. regulators directed five of the country's biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.

The two-year-old program, which has been largely secret until now, is in addition to the "living wills" the banks crafted to help regulators dismantle them if they actually do fail. It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress.
http://www.infowars.com/are-the-government-and-the-big-banks-quietly-preparin...
by Michael Snyder


http://theeconomiccollapseblog.com/

Thanks AnnaEsse, I think the difference now is that the great depression of the 20's obviously affected millions who were mainly poor anyway. Now, the population of the Western World has grown more and more reliant on material things and softened up in the process. This will make it harder for any Civilisation to start from scratch again and now we have a global crisis and I think you would have to be an eskimo to survive. LOL

Panda wrote:The U.S. Attorney General has issued subpoenas for the following Banks:- UBS, Citigroup, Deutchebank, Barclays, HSBC JP Morgan and RBS.

It is estimated that 900 thousand US Mortgages could by affected and expect the Lawyers to make a fortune from handling clients claims .

RBS is already in financial difficulty and would be better off going into liquidation than facing massive fines and Legal fees and possible claims...well done Gordon Brown for buying 82% of RBS.!!!!!

RBS IN FINANCIAL TROUBLE,I AM WITH THEM

SEPARATLY,I WAS DOING A HOUR LONG SURVEY TODAY ABOUT BANKS.

Badboy wrote:

Panda wrote:The U.S. Attorney General has issued subpoenas for the following Banks:- UBS, Citigroup, Deutchebank, Barclays, HSBC JP Morgan and RBS.

It is estimated that 900 thousand US Mortgages could by affected and expect the Lawyers to make a fortune from handling clients claims .

RBS is already in financial difficulty and would be better off going into liquidation than facing massive fines and Legal fees and possible claims...well done Gordon Brown for buying 82% of RBS.!!!!!

RBS IN FINANCIAL TROUBLE,I AM WITH THEM

SEPARATLY,I WAS DOING A HOUR LONG SURVEY TODAY ABOUT BANKS.

Hi Badboy, as a precaution I would put your money in a Building Society. RBS is in debt to the Government for 82% and it's shares , which are going to be worthless by the time this is all over. may well result in liquidating the Bank. A few years ago Nick Leeson a Trader employed by Coutts, a Private Bank lost billions on trading and the Bank folded.Of the 7 banks charged, 5 could have their licence to operate in the U.S.A. revoked , Standard Chartered paid a fine and got off but still faces possible actions from other Countries , but unlike RBS, has enough Capital to withstand these fines.























but still faces

Libor Scandal: British Banks Face US Inquiry


Seven banks, including Barclays, HSBC and Royal Bank of Scotland, are summoned in the US over Libor fixing.


7:03am UK, Thursday 16 August 2012

Barclays has already been fined £290m

• Three British banks are to be questioned in the US over alleged manipulation of the Libor benchmark international lending rates.
  

New York Attorney General Eric Schneiderman and Connecticut Attorney General George Jepsen have been looking into the possible rigging and manipulation of Libor by global banks for months.

As part of that investigation, they have issued summons to Barclays, HSBC and Royal Bank of Scotland, as well as four other banks - Citigroup, Deutsche Bank, JPMorgan Chase, and UBS, a source said.

They face hefty fines and legal costs if misconduct is found.

Barclays has already been fined £290m by British and US authorities.

Libor, or the London Interbank Offered Rate, is the lending rate that affects mortgages and loans.

The Government has commissioned a review into the Libor-setting system which could result in the controversial rate being replaced.

Martin Wheatley, the City financier tasked with reviewing Libor, has suggested the setting of the rate could be overseen by a new independent body in future rather than the British Bankers' Association.

He has also proposed the introduction of criminal sanctions against those attempting to manipulate Libor.

Of the three British banks which are said to have received subpoenas, both RBS and HSBC told Sky News they were co-operating with investigations.

Barclays declined to comment

==================================

This is like closing the gate after the horse has bolted. It was the young guys in the Investment arms of these Banks

who discussed every morning with their colleagues in all the Investment Banks around the World what the LIBOR rate should be. This affected Mortgage rates, Interest on Loans etc. The Bosses knew that the rates were being manipulated but turned a blind eye.

It is not only the Governments who will receive these hefty fines, the Banks are being sued by Councils, Loan Companies and others using the Libor rate set by these Banks.

Badboy wrote:

Panda wrote:

Badboy wrote:

Panda wrote:The U.S. Attorney General has issued subpoenas for the following Banks:- UBS, Citigroup, Deutchebank, Barclays, HSBC JP Morgan and RBS.

It is estimated that 900 thousand US Mortgages could by affected and expect the Lawyers to make a fortune from handling clients claims .

RBS is already in financial difficulty and would be better off going into liquidation than facing massive fines and Legal fees and possible claims...well done Gordon Brown for buying 82% of RBS.!!!!!

RBS IN FINANCIAL TROUBLE,I AM WITH THEM

SEPARATLY,I WAS DOING A HOUR LONG SURVEY TODAY ABOUT BANKS.

Hi Badboy, as a precaution I would put your money in a Building Society. RBS is in debt to the Government for 82% and it's shares , which are going to be worthless by the time this is all over. may well result in liquidating the Bank. A few years ago Nick Leeson a Trader employed by Coutts, a Private Bank lost billions on trading and the Bank folded.Of the 7 banks charged, 5 could have their licence to operate in the U.S.A. revoked , Standard Chartered paid a fine and got off but still faces possible actions from other Countries , but unlike RBS, has enough Capital to withstand these fines.
I THOUGHT NICK LEESON WAS EMPLOYED BY BARINGS,OR AM I CONFUSED?






















but still faces

No, Nick Leeson was employed by Coutts, a Private Bank, working in Singapore. He was trading in Currencies, losing a lot of money, trying deperately to get back into the black but in the end the losses were so huge Coutts were bankrupt and were forced to shut down. I think they were the Queens Bank at the time but I presume her account was removed before the crisis was made public. Nick Leeson was jailed

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Former Barclays boss Bob Diamond has hit back at claims he was "highly selective" in his evidence to MPs.

The Treasury Select Committee said Mr Diamond's evidence on the Libor fixing scandal had fallen well short of the standards expected by Parliament.

But Mr Diamond said he was disappointed and strongly disagreed with several of the committee's statements.

"In particular, I strongly challenge certain assertions about my testimony," Mr Diamond said.

"I answered every question that was put to me to me truthfully, candidly and based on information available to me."

More follows...

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  Video: Diamond Tells MPs: I Love Barclays
  
  
  
  
  
  

3,000 U.K. Bank layoffs expected.

Deutchebank is being investigated by 5 different U.S. Agencies, it's share price has dropped as have all the Banks caught up in the Libor scandal.

The way things are going, the hefty fines imposed by the U.S. they will be able to pay off their debt to China.

The Bank of England and the FSA have come in for strong criticism by the Treasury Committee suggesting they were too

busy ticking boxes.

Secret Libor Committee Clings to Anonymity After Rigging Scandal


By Liam Vaughan - Aug 21, 2012 12:01 AM GMT+0100


Every two months, representatives from the world’s largest banks meet at an undisclosed location to review the London interbank offered rate.

Who sits on the British Bankers’ Association’s Foreign Exchange and Money Markets Committee, the body that governs the benchmark for more than $300 trillion of securities worldwide, is a secret. No minutes are published. The BBA won’t identify any members, saying it wants to protect them from being lobbied, and declined to make the chairman available for interview.





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Financial Services Authority MD Martin Wheatley




Simon Dawson/Bloomberg

Martin Wheatley, managing director of the Financial Services Authority.

Martin Wheatley, managing director of the Financial Services Authority. Photographer: Simon Dawson/Bloomberg




7:41
Aug. 16 (Bloomberg) -- Richard Bove, an analyst at Rochdale Securities, talks about the London interbank offered rate, Libor, scandal. JPMorgan Chase & Co. and Citigroup Inc. are among seven banks subpoenaed in New York and Connecticut's investigation into alleged manipulation of Libor, according to a person familiar with the matter and company filings. Bove speaks with Stephanie Ruhle and Scarlet Fu on Bloomberg Television's "Market Makers. (Source: Bloomberg)




9:58
Aug. 16 (Bloomberg) -- Arthur Levitt, former chairman of the U.S. Securities and Exchange Commission and a Bloomberg LP board member, discusses the investigation into alleged manipulation of Libor. He speaks with Francine Lacqua on Bloomberg Television's "City Central." (Source: Bloomberg)




57:59
Aug. 16 (Bloomberg) -- Martin Wheatley, managing director of the U.K.'s Financial Services Authority, gives a speech on the need to overhaul the process of setting the London interbank offered rate. He spoke Aug. 10 at Bloomberg's European headquarters in London. Bloomberg's Lindsay Fortado moderates a question and answer session following the speech. (Source: Bloomberg)

The group’s lack of transparency is symptomatic of a self-regulated system that failed to stop traders around the world manipulating the world’s most widely used benchmark interest rate for profit. Martin Wheatley, the British regulator charged with reviewing Libor after the scandal, is now weighing whether to bring oversight under the control of regulators.

“Politically something has to fundamentally change in the way that Libor is run,” said Owen Watkins, a former regulator at the U.K. Financial Services Authority and now a lawyer at Lewis Silkin LLP in London. “The obvious way to change it is to have regulators more involved than they were in the past.”

The group has sole responsibility for all aspects of the functioning and development of Libor, according to the BBA. Its functions include the design of the benchmark, which banks sit on the panels that determine the rate, and scrutiny of all rates submitted.

‘Highly Experienced’


Members are “highly experienced market participants” who are independent of the BBA “and any other organization,” the website says. Still, all committee members act as “individuals representing their firms,” the BBA says. The chairman is also drawn from one of the banks that submit to the rates.

“Benchmark-setting is a process which affects the public good in that it brings certainty to markets,” said Greg Ford, a spokesman for Finance Watch, a Brussels-based public interest lobby group. “For that reason it needs the highest forms of governance and protection. Anonymity doesn’t fit that at all. How can you control conflicts of interest when you don’t know who you are dealing with?”

Spokesmen at Credit Suisse (CSGN) Group AG, Royal Bank of Scotland Group Plc (RBS) and UBS AG (UBSN) declined to comment on whether they have any representatives on the committee, or their identities.Barclays Plc (BARC), Deutsche Bank AG, HSBC Holdings Plc (HSBA), Bank of America Corp and Citigroup Inc. (C) didn’t reply to e-mails seeking information on their involvement in the committee.

Transparency Lacking


“There is an apparent lack of transparency,” Wheatley said in a discussion paper published Aug. 10. The scrutiny provided by the BBA’s Foreign Exchange and Money Markets committee “doesn’t appear to be sufficiently open and transparent to provide the necessary degree of accountability to firms and markets with a direct interest in being assured of the integrity of Libor.”

The benchmark is determined by a daily poll carried out on behalf of the BBA that asks banks to estimate how much it would cost to borrow from each other for different periods and in different currencies. At least a dozen firms are being probed worldwide over allegations they manipulated the rate.

Dan Doctoroff, chief executive officer of Bloomberg LP, proposed an alternative to Libor, dubbed the Bloomberg Interbank Offered Rate, in a Wall Street Journal opinion piece this month. Bloomberg LP is the parent of Bloomberg News.

The committee has so far failed to produce reforms that convince regulators and to levy sanctions against banks that have admitted to manipulating the rate. After the Bank for International Settlements first raised concern Libor was open to manipulation in 2008, the committee stepped up scrutiny of rate submissions.

`Wholly Inadequate'

Bank of England Governor Mervyn King described the response as “wholly inadequate” and ordered any reference to the central bank to be removed from the BBA document explaining the changes, according to correspondence between the bank and theNew York Federal Reserve released in July.

One power the committee did introduce was to grant itself the right to remove any banks “unquestionably in breach of the Libor definition or terms of reference,” according to the BBA.

It hasn’t exercised that power -- even after Barclays Plc was fined a record 290 million pounds ($453.4 million) on June 27 for rigging the rates over more than four years. Barclays sits on the panel for rates including U.S. dollar Libor, Sterling Libor and Swiss Franc Libor.

“Libor panels are always kept under review,” BBA spokesman Brian Mairs said in an e-mailed statement. “Following the recent regulatory ruling at Barclays, the BBA and others are working to ensure the integrity of the benchmark.”

Workable Rate


The committee may be reluctant to ban lenders, because that would make it hard to construct a workable rate, said Finance Watch’s Ford. The dozen banks still being probed are among the biggest players in an illiquid interbank market, he said.

In Japan, regulators have suspended banks for lapses in their rate-submission processes. In December, the Financial Services Agency ordered UBS AG to suspend trading for a week in derivatives tied to yen Libor and Euroyen Tibor, the Tokyo Interbank Offered Rate for yen held overseas. The following month, Citigroup’s Tokyo-based trading unit was banned from dealing in securities tied to Libor and Tibor, the Tokyo interbank offered rate, for two weeks.

I READ TODAY THAT RBS AND COMMERZBANK ARE BEING INVESTIGATED CONCERNING SANTION BUSTING CONCERNING IRAN,A BIGFINE POSSIBLY ON WAY

Badboy wrote:I READ TODAY THAT RBS AND COMMERZBANK ARE BEING INVESTIGATED CONCERNING SANTION BUSTING CONCERNING IRAN,A BIGFINE POSSIBLY ON WAY

There are 7 Banks under investigation Badboy, RBS, HSBC, Duetchebank, JP Morgan, Citigroup, Chase and Co , can't remember the seventh, probably Commerbank. They will have Fines of Millions and appear in Court.

Panda wrote:

Badboy wrote:I READ TODAY THAT RBS AND COMMERZBANK ARE BEING INVESTIGATED CONCERNING SANTION BUSTING CONCERNING IRAN,A BIGFINE POSSIBLY ON WAY

There are 7 Banks under investigation Badboy, RBS, HSBC, Duetchebank, JP Morgan, Citigroup, Chase and Co , can't remember the seventh, probably Commerbank. They will have Fines of Millions and appear in Court.

They will fine them millions for fraudulent and illegal trading and rightly so, but shareholders will still get their dividends and the corrupt higher management and especially CEOs will get bonus payouts that collectively could pay off our national debt.

This is unbelievable.......the Female head of the Securities Commission in the U.S. wanted to bring in New Laws etc

to ensure this doesn't happen again and that the whole buying and selling of shares is monitored but she suffered defeat

in the vote by the Vice President.!!!!

Panda wrote:This is unbelievable.......the Female head of the Securities Commission in the U.S. wanted to bring in New Laws etc

to ensure this doesn't happen again and that the whole buying and selling of shares is monitored but she suffered defeat

in the vote by the Vice President.!!!!

Just how high up the tree does corruption go? Obviously very high in the states.

THE QE HAS MADE THE RICHER RICHER,IS THIS THE RIGHT THREAD TO POST THIS.

HSBC in Settlement Talks With U.S. Over Money Laundering


By Tiffany Kary and Greg Farrell - Aug 24, 2012 8:26 AM GMT+0100

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HSBC Holdings Plc (HSBA), which is under investigation by U.S. regulators for laundering funds of sanctioned nations including Iran and Sudan, is in talks to settle the matter, two people with knowledge of the case said.

The bank, Europe’s largest by market value, made a $700 million provision in July for any U.S. fines after a Senate Committee found it had given terrorists and drug cartels access to the U.S. financial system. That sum might increase, Chief Executive Officer Stuart Gulliver has said.





Enlarge image

HSBC CEO Stuart Gulliver




Jerome Favre/Bloomberg

Stuart Gulliver, group chief executive officer of HSBC Holdings Plc.

Stuart Gulliver, group chief executive officer of HSBC Holdings Plc. Photographer: Jerome Favre/Bloomberg




1:47
July 17 (Bloomberg) -- U.S. Senator Carl Levin, a Michigan Democrat who chairs the Senate Permanent Subcommittee on Investigations, says HSBC Holdings Plc was involved in money-laundering violations in Mexico and criticized the Office of the Comptroller of the Currency for failing to treat repeated deficiencies. Mark Barton reports on Bloomberg Television's "First Look." (Source: Bloomberg)




6:05
July 17 (Bloomberg) -- Chris Skinner, chief executive officer of Balatro Ltd., talks about the U.S. Senate investigation of HSBC Holdings Plc, which found the bank did business with firms linked to terrorism and failed to guard against money-laundering violations in Mexico. Skinner also discusses the Libor rate-setting scandal with Owen Thomas on Bloomberg Television's "First Look." (Source: Bloomberg)

An HSBC settlement regulators and the Manhattan District Attorney were aiming to conclude as early as September may have been slowed when New York’s banking superintendent accused Standard Chartered of laundering $250 billion for Iran. Regulators had been talking with both banks about universal accords when Benjamin Lawsky on Aug. 6 threatened to revoke Standard Chartered’s license. Deals with the London-based banks next month are still possible, said the people, who asked not to be identified because the investigations are confidential.

“This is an epidemic of banks willfully, consistently violating economic sanctions,” Jimmy Gurule, a former undersecretary for enforcement at the U.S. Treasury, said of sanctioned-nation money laundering. “It calls for more serious sanctions than a monetary fine for an individual bank that does nothing more than harm shareholders.”

Set Aside


HSBC’s $700 million set-aside, if paid, would constitute the largest U.S. settlement reached over such allegations, topping the $619 million in penalties and forfeitures paid in June by ING Groep NV (INGA), the biggest Dutch financial-services company. Standard Chartered agreed on Aug. 14 to pay $340 million to settle the New York state matter, an accord that broke a previous pattern of resolving all such U.S. probes at once in a unified agreement.

HSBC’s credit-rating outlook was cut yesterday by Standard& Poor’s, which questioned whether the lender is too big to be managed effectively in the wake of money-laundering investigations. S&P reduced its outlook on HSBC’s long-term rating to negative from stable.

HSBC fell 0.8 percent to 554.50 pence at 8:09 a.m. in London trading today.

HSBC, Standard Chartered and other European banks have been under investigation by U.S. regulators that include the Treasury Department’s Office of Foreign Assets Control, the Federal Reserve and Manhattan District Attorney Cyrus Vance Jr.

Other Banks


The multiyear probe into money-laundering has resulted in settlements with Lloyd’s Banking Group Plc, ABN Amro Bank NV,Barclays Plc (BARC), Credit Suisse Group AG (CSGN) and ING.

Other European banks, including Deutsche Bank AG (DBK) and Royal Bank of Scotland Group Plc (RBS), are cooperating with U.S. regulators in similar investigations, according to other people familiar with the matter. Two French banks, Credit Agricole (ACA) SA and BNP Paribas SA (BNP), are also working with U.S. authorities in similar probes, according to their regulatory filings.

“Here we are at bank number seven, with Standard Chartered, and no individual banker has been held criminally responsible, and that’s a shame,” said Gurule, a professor at the University of Notre Dame. “Checks and balances on banks weren’t working. Bad conduct was going on for years undetected.”

HSBC handled so-called U-turn transactions through U.S. banks that involved funds from Iran to non-U.S. banks, altering its transaction records to obscure information about its clients, according to U.S. Senate testimony in July.

Iran Transactions


Around 25,000 transactions with Iran worth more than $19.4 billion were made with about 90 percent passing through the U.S., according to an audit by Deloitte LLP. Senate investigators documented similar transactions with North Korea, Cuba, Sudan and Burma, which along with Iran are subject to sanctions administered by the Office of Foreign Assets Control.

HSBC also dealt with Al-Rajhi Bank (RJHI), a Saudi Arabian client whose account the bank closed in 2005 over alleged terrorist financing before reopening it in 2007, according to the Senate testimony.

Christopher Lok, former head of global banknotes at HSBC Bank USA, testified that while Al-Rajhi was a “controversial name,” the bank’s group compliance department had reversed earlier concerns and allowed business to proceed. David Bagley, HSBC’s head of group compliance, announced July 17 at the Senate hearing that he would step down.

’Overwhelming Information’


From 2000 to 2009, HSBC also gave its lowest risk rating to Mexico despite “overwhelming information” that it posed a high risk for drug trafficking and money laundering, Senate investigators wrote in their report.

HSBC, which declined to comment on the matter, said in its 2011 annual report that it “continues to cooperate in ongoing investigations” by the Department of Justice, the Manhattan District Attorney, the Office of Foreign Asset Control, the Federal Reserve and the Office of the Comptroller of the Currency “regarding historical transactions involving Iranian parties and other parties subject to OFAC economic sanctions.”

Erin Duggan, a spokeswoman for Vance, Barbara Hagenbaugh of the Federal Reserve, David Neustadt of Lawsky’s Department of Financial Services and John Sullivan of Treasury’s OFAC unit declined to comment on the matter.

In the prior five settlements, the banks involved agreed to pay or forfeit money under so-called deferred prosecution agreements that mandate improved compliance systems. If the agreement is followed, the banks will avoid criminal prosecution.

Bank Settlements


Aside from ING’s record payment, ABN Amro paid $500 million in 2010, London-based Barclays paid $298 million in 2010, Zurich-based Credit Suisse paid $536 million in 2009, and London-based Lloyds paid $350 million in 2009.

Some investigations don’t result in such agreements because wrongdoing isn’t found, one of the people familiar with the HSBC case said.

Paris-based BNP Paribas and Credit Agricole have both disclosed probes into potential U.S. sanction violations in their annual reports since 2009, and added new disclosures in 2011 to indicate that outcomes would be difficult to predict.

BNP said in 2011 that following discussions with the U.S. Department of Justice and Vance’s office, it was reviewing operations to see if it has complied with sanction rules of the Office of Foreign Assets Control.

Credit Agricole likewise said in 2011 that it was cooperating with the Manhattan District Attorney and “other American governmental authorities” who sought information about payments in U.S. dollars involving sanctioned countries.

Credit Agricole and Credit Agricole CIB, its investment banking unit, were conducting internal reviews, the company said.

“It’s time to reexamine the audit function of federal regulators,” said Gurule of U.S. regulations meant to enforce sanctions. “It’s bad and the system is not working.”

“Here we are at bank number seven, with Standard Chartered, and no individual banker has been held criminally responsible, and that’s a shame,” said Gurule, a professor at the University of Notre Dame. “Checks and balances on banks weren’t working. Bad conduct was going on for years undetected.”


This says it all ....., shareholders never vetoed those enormous bonuses, King, due to retire next year didn't think it was

necessary to inform the FSA when he was advised by the U.S. of what was going on way back in 2008 I hope everybody closes their accounts and transfers the money to Ethical Banking.

Billion-euro whistleblower



24 August 2012El País Madrid

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Hervé Falciani in Nice in 2009.


Hervé Falciani is the 40-year-old computer technician who provided several European governments access to files listing the names of the thousands of their citizens evading taxes via bank accounts at HSBC's Swiss affiliate. Arrested in Barcelona in late July, he is awaiting extradition to Switzerland. Excerpts.

Manuel Altozano

He did not have to look far to find them. They were there, on his computer screen, the one he worked at for six years at HSBC's Geneva headquarters.

Hervé Falciani was responsible for upgrading client databases in one of the world's largest banks and the information to which he had access in October 2006 was priceless. The data, protected by Switzerland's sacrosanct secrecy laws, concerned millionaire depositers' accounts left to blossom over the course of years thanks to covert transfers and financial flows of doubtful, but untraceable, origins.

Then 34-years-old, the computer programmer had before him the list of thousands of bank deposits of foreign businesses and private citizens, placed safely in Switzerland to evade the tax authorities in their respective countries. It was one of the most significant tax evasion cases ever uncovered.

The following scene took place nearly six years later, in the port of Barcelona. On July 1, 2012, Hervé Falciani went to Spain by boat and an alarm bell went off during an identity check.

Branded a thief


An international arrest warrant was issued for Falciani, who is a citizen of Monaco with dual French and Italian citizenship, is married and has a child. Despite the fact his actions revealed thousands of cases of tax evasion all over Europe and some €10 billion in lost taxes were recovered, Bern considers him a criminal, a thief.

He has been arrested and, now, the Bellinzona Federal Tribunal eagerly awaits his return in order to prosecute him for theft of private data as well as for violation of the commercial secrets and banking secrecy laws. But first of all, Spain has to decide to extradite him.

Six intense years have passed between Falciani's incredible discovery and his arrest in Barcelona. During this time the computer programmer became a fugitive whose worth is measured by the value of the information he has at his disposal. He is a criminal who must be tried and incarcerated, according to those who want to destroy the data. But he is seen a sort of hero, a Robin Hood needing protection, according to those who would like to obtain it. Here is what happened in those six years.

After his October 2006 discovery, Falciani spent part of each work day downloading the suspicious data onto his laptop computer. He did this systematically for two years, without exception.

Arrested


Then on March 20, 2008, the Swiss Association of Bankers, a lobby group for Swiss financial interests, sent out a warning. On February 4, a man calling himself Ruben El-Chidiak, had gone to the Audi Bank in Beirut to negotiate the sale of data containing the names of clients of various Swiss banks. According to the Association, this information was obtained through theft. Banking secrecy laws, the pillar of Swiss identity, was under threat.

The police discovered that Ruben El-Chidiak was really Hervé Falciani. On December 20, 2008, Falciani and a colleague were arrested and questioned. Quickly released, Falciani settled the next day in Castellar, a village on the French Riviera near the Italian border. He was thus poised between the two countries of which he is a citizen. In this way he escaped Bern's clutches because neither France nor Italy will extradite one of their own citizens. Switzerland continued to request his return because it wanted to recover the data downloaded by Falciani, who, according to the prosecutor and HSBC, is guilty of theft.

Switzerland then issued an international arrest warrant for him. Yet, during this desperate pursuit, the Swiss authorities committed a serious error. They asked the French authorities to search Falciani's house, to seize his laptop computer and to send them his archives.

Tax treasure trove


On January 20, 2009 the French Nice assistant prosecutor called for a search of Falciani's family home. The routine operation turned into a remarkable find when 130,000 accounts of alleged tax evaders were discovered. The prosecutor opened an investigation, which is not aimed at the programmer but at the holders of the said accounts.

Word of the Falciani case got out and sparked a diplomatic crisis between France and Switzerland. Bern accused France of illegally keeping the stolen data. The government of [then-president Nicolas] Sarkozy for its part, threatened to have Switzerland added to the OECD Tax Haven Black List.

The media got hold of the case in August 2009. The French Budget Minister, Eric Woerth, announced that he had a list of 3,000 holders of Swiss bank accounts but without revealing the origin of the data. He asked that account holders make themselves known to the tax authorities in order to legalise their situation. This prompted 4,200 people to come forward to the tax authorities and France recuperated €1.2 billion in unpaid taxes.

The few names revealed in the French press led to a series of scandals, in particular the case of Patrice de Maistre – financial manager for Liliane Bettencourt, the main shareholder in cosmetics giant l'Oréal – as well as the cases of the heiress of Nina Ricci perfumes and of Jean-Charles Marchiani, a close associate of a former French Interior Minister, Charles Pasqua. Meanwhile, Switzerland continued to pressure France into handing over Falciani's laptop computer.

Caring is sharing


Paris finally agreed to the request in February 2010. However, before doing so, the prosecutor sent copies of the files, if they requested them, to all the countries with which Paris has tax cooperation agreements.

On May 24, 2010, the information communicated by France was already being studied at the headquarters of the Spanish tax office. The officials asked suspected tax evaders to turn themselves in and to pay their due, plus a fine. The amounts recovered in Spain thanks to the information downloaded by Falciani currently represents the most significant tax recovery operation in the history of the tax office. According to unofficial sources, more than €6 billion were recovered. The list contains powerful people such as Emilio Botín, CEO of the Santander Bank.

Other great names appear on the list sent to Italy. That list of 6,963 people includes fashion designers Valentino and Renato Balestra. In all, the Italian Treasury recovered some €570 million thanks to HSBC's Swiss accounts.

Motive mystery


There is still one remaining mystery. What were Hervé Falciani's intentions in downloading the files to his laptop computer? Did he wish to see justice done and to blow the whistle on the fraudulent practices of his company, as he has claimed from the beginning, or did he simply want to sell the data for a considerable sum of money as the Swiss justice department maintains? One can also wonder if Falciani has additional information and if he can still be useful in investigating further wrong-doing.

Just two weeks after his arrest, the United States Senate Permanent Subcommittee on Investigations published a report on the lack of control at HSBC regarding money laundering.

The list of Hervé Falciani's enemies – which already includes the Swiss department of justice; HSBC, one of the most powerful banks in the world; and thousands of tax evaders – may have to be expanded to dangerous criminal groups such as Al-Qaeda and Mexican drug cartels. He is conscious of the value of the information he holds. He knows that a headlong rush is his only option.

CO-OP BANK HAS GONE IN TO THE RED.
IT HAS BEEN SUGGESTED THAT ORDINARLY EMPLOYEES FIDDLED WITH THE LIBOR FIGURES WHILE THE EMPLOYEES THAT DEALT WITH LIBOR WERE AWAY FROM THEIR DESKS.

Fidelity Joins BlackRock in Weighing Libor Action Against Banks


By Christopher Condon and Alexis Leondis - Jul 26, 2012 3:54 PM GMT+0100


BlackRock Inc. (BLK), Fidelity Investments and Vanguard Group Inc., firms that collectively manage more than $7 trillion, are gauging how their clients have been hurt by Libor manipulation and whether to take legal action as at least a dozen banks are being investigated for rate-rigging.

The money managers can take cues from Charles Schwab Corp. (SCHW)and the city of Baltimore, which in lawsuits predating the record fine levied on London-based Barclays Plc (BARC) last month, sued lenders for artificially suppressing, Libor, or the London interbank offered rate. Schwab alleged last year that returns on money funds and short-term debt strategies were depressed by the banks’ actions, while Baltimore’s lawsuit against Barclays and other banks stems from lower returns on interest-rate swaps.





Enlarge image

BlackRock CEO Laurence D. Fink




Scott Eells/Bloomberg

Laurence "Larry" D. Fink, chairman, chief executive officer and co-founder of BlackRock Inc.

Laurence "Larry" D. Fink, chairman, chief executive officer and co-founder of BlackRock Inc. Photographer: Scott Eells/Bloomberg




23:37
July 3 (Bloomberg) -- Laurence Fink, chairman and chief executive officer of BlackRock Inc., talks about the resignation of Barclays Plc Chief Executive Officer Robert Diamond, issues of trust in the global banking system, the U.S. economy and European debt crisis, U.S. politics and health care, and investment strategy. He speaks with Erik Schatzker and Trish Regan on Bloomberg Television's "Market Makers." (Source: Bloomberg)

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Libor-related litigation “has the potential to be the biggest single set of cases coming out of the financial crisis because Libor is built into so many transactions and Libor is socentral to so many contracts,” said John Coates, a professor of law and economics at Harvard Law School in Cambridge, Massachusetts. “It’s like saying reports about the inflation rate were wrong.”

Global regulators are reviewing the rate-setting mechanism and contemplating criminal charges against bank traders who manipulated Libor, a benchmark interest rate for about $500 trillion in financial products. While Libor affects a broad range of investments from money funds to leveraged buyout financing, firms seeking to sue may struggle to quantify losses and pinpoint which banks are responsible for them, according to interviews with more than half-a-dozen industry executives, lawyers and former regulators.

Barclays Fine


Barclays was fined 290 million pounds ($449 million) by U.S. and U.K. regulators on June 27 after admitting it submitted false rates. The scandal led to the resignation of Robert Diamond as the bank’s chief executive officer.

Barclays, like other lenders that help set Libor rates, could potentially face lawsuits from any investor that was on the wrong side of the transactions, who could claim that they were kept in the dark about a key benchmark. Barclays is a defendant in at least 24 interrelated lawsuits that have been aggregated in Manhattan federal court.

Libor is determined by a daily poll carried out on behalf of the British Bankers’ Association that asks banks to estimate how much it would cost to borrow from each other for different periods and in different currencies. Quotes in the top and bottom quartile are excluded and an average of the remaining entries is calculated.

‘Important’ Number


Libor is used as the basis for pricing securities including the rate of return on short-term variable and fixed-rate bonds as well as for the pricing and settlement of Eurodollar futures and options. The British Bankers’ Association has called it“the world’s most important number” on its website.

For investment firms, money-market funds would probably be most affected by Libor-rigging, said Robert Pozen, a senior lecturer at Harvard Business School. Returns earned by investors in money funds, which hold only short-term debt, would decline if Libor were kept lower, he said.

BlackRock, which oversees $3.56 trillion; Fidelity, which manages $1.6 trillion; and Vanguard, with $2.1 trillion, said they’re examining the impact on clients.

Evaluating Actions


“On behalf of our clients and shareholders, we have been following developments in the Libor market and the related litigation activity for some time,” Vincent Loporchio, a spokesman for Boston-based Fidelity, said in an e-mailed statement. “We have noted recent news with interest and continue to evaluate our options.”

BlackRock, the world’s largest asset manager, said litigation surrounding Libor is complex and that “it will be some time before greater clarity emerges,” according to Bobbie Collins, a spokeswoman for the New York-based company.

Laurence D. Fink, chief executive officer of BlackRock, said in a July 3 interview on Bloomberg Television’s “Market Makers” that Diamond “led with a lot of emotion which obviously” angered regulators and others in the U.K. “For me, it’s sad. I know Bob very well,” Fink said.

Barclays owned a 19.6 percent stake in BlackRock until May, when the bank sold the holding and Diamond stepped down from the money manager’s board. Barclays took the stake in December 2009, when it sold its investment unit to BlackRock.

Vanguard, the world’s largest mutual-fund company, “will take some time to determine the impact and conduct a cost-benefit analysis before pursuing other actions on behalf of the funds,” John Woerth, spokesman for the Valley Forge, Pennsylvania-based firm, said in an e-mail.

‘Considering Litigation’


“We are evaluating the facts and considering litigation,”Meghan McAndrew, a spokeswoman for Pittsburgh-based Federated Investors Inc. (FII), said in a statement. Federated manages about $364 billion and is the third-biggest provider of U.S. money-market funds behind Fidelity and JPMorgan Chase.

It wouldn’t be the first time that investment firms would be pitted against banks over losses stemming from the financial crisis. BlackRock and Pacific Investment Management Co. were part of an investor group that brought claims against Bank of America Corp. over mortgage bonds they had purchased, which last year resulted in an $8.5 billion settlement agreement. That settlement is now being challenged by other investors and state regulators.

Rival Banks


Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) are among financial firms that may bring lawsuits against their rivals, Bradley Hintz, an analyst with Sanford C. Bernstein & Co., said last week. Even if Goldman Sachs and Morgan Stanley forgo claims on their own behalf, they oversee money-market funds that may be required to pursue restitution for injured clients, he said.

It’s not just lower rates that hurt investment firms. Libor rates that were artificially inflated could also potentially damage investors such as private-equity firms, which obtain deal financing based on the benchmark rate.

Regulators are looking at whether banks made submissions that understated funding costs during the credit crisis or if traders at the firms influenced Libor to boost profits. In addition to Barclays, UBS AG (UBSN), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Credit Suisse Group AG (CSGN) are among at least a dozen banks to disclose inquiries.

Attorneys general in at least five states in the U.S. are conducting investigations tied to manipulation of Libor, adding to probes by regulators including the U.S. Justice Department.

‘Complicated Case’


If the banks involved in the scandal neither admit nor deny wrongdoing to the Justice Department, it’s a much harder case for fund companies, said Harvard’s Pozen. To make a legal case, investment firms would have to show which banks’ Libor submissions were included in the daily rate, how much they affected the average and quantify how much money their funds have lost, he said.

“While you can say in general money-market funds got less than they should have, for them to win a court case, they would have to show who’s culpable for that,” Pozen said. “It’s a complicated case and in order to win, someone has to go day-by-day to show who did what and how it influenced Libor and how it influenced the fund managers’ investment decisions.”

Instead of trying to prove one or two banks influenced the rate fraudulently, plaintiffs might accuse the banks collectively of conspiring to rig the rate, Barry Barbash, head of the asset-management group at law firm Willkie Farr & Gallagher LLP, said in a telephone interview.

“Both theories are hard to show,” said Barbash, a former director of the U.S. Securities and Exchange Commission’s division of investment management.

Illinois Brick


Among existing lawsuits, the city of Baltimore may stand a better chance than Schwab of winning back investment losses linked to the Libor-rigging scandal if U.S. courts stick to a precedent set by a 1977 landmark price-fixing case.

The Supreme Court’s ruling in Illinois Brick Co. versus Illinois barred indirect purchasers from recovering federal antitrust damages, Andrew Verstein, a lecturer at Yale Law School, said in a telephone interview. Applied to the alleged manipulation of Libor, he said only investors such as Baltimore, that lost out in transactions directly with rate-rigging banks, might successfully sue.

“Different plaintiffs will fight about this precedent”depending on whether it helps or hurts their case, said Verstein, who is also executive director of the school’s Center for the Study of Corporate Law.

Baltimore Lawsuit


Baltimore’s case, filed last year, stems from its purchase of interest-rate swaps aimed at protecting the city from an increase in rates after it sold variable-rate bonds. When Libor was artificially pushed down, Baltimore’s suit alleges, the city got a lower rate of return.

“I am going to fight for this city and do what I can to protect the city taxpayers who ultimately suffered financial damage as result of Libor manipulation,” Baltimore’s Mayor Stephanie Rawlings-Blake said in an e-mailed statement.

Schwab, based in San Francisco, is attempting to recover money it said its mutual funds and other investment products lost when they bought short-term debt instruments with interest rates linked to Libor. While some of the debt Schwab funds bought was issued directly by banks accused of rigging Libor, some of it was also purchased from third parties, according to the suit. The suit names more than a dozen financial institutions as defendants, including units of Barclays, Bank of America, Citigroup, JPMorgan Chase and Credit Suisse.

Sarah Bulgatz, a spokeswoman for Schwab, said the firm doesn’t comment on pending litigation.

Credit Suisse CEO Brady Dougan said during a July 18 conference call with analysts that “we don’t believe that we have any material issues” related to Libor.

Valid Claim


Steven Vames, a spokesman in New York for Zurich-based Credit Suisse, declined to comment, as did Karina Byrne, a spokeswoman for UBS, Danielle-Romero Apsilos, a spokeswoman for Citigroup, Kerrie Cohen, a spokeswoman for Barclays, and Lawrence Grayson, a spokesman for Bank of America. Jennifer Zuccarelli, a spokeswoman for JPMorgan Chase, did not immediately return calls.

Dan Brockett, a partner in the New York office of Quinn Emanuel Urquhart & Sullivan LLP, said plaintiffs that didn’t buy securities directly from lenders who set Libor rates when the benchmark was being manipulated still have a valid claim because the banks allegedly did have a direct impact on the pricing of securities and it was foreseeable that their actions would have an impact on holdings.

“We still think there’s a respectable claim by a third party investor that didn’t buy securities directly from one of the Libor banks under federal securities law and common law fraud,” Brockett said.

========================================

Looks like there will be litigation for years.....how many Banks will survive hefty fines and Lawsuits when their share price

is tumbling because of this scandal, Fitch and Moodys' downgrades and interbank lending to European Banks.

GOOD QUESTION,DID THOSE $TRILLION INVESTMENT FIRMS INVESTMENTS COME FROM THE RICH?
AT THE RATE BANKS ARE BEING FINED,I WONDER IF SOME BANKS WILL GO BANKRUPT.

Billion-euro whistleblower



24 August 2012El País Madrid

• 
  

Hervé Falciani in Nice in 2009.


Hervé Falciani is the 40-year-old computer technician who provided several European governments access to files listing the names of the thousands of their citizens evading taxes via bank accounts at HSBC's Swiss affiliate. Arrested in Barcelona in late July, he is awaiting extradition to Switzerland. Excerpts.

Manuel Altozano

He did not have to look far to find them. They were there, on his computer screen, the one he worked at for six years at HSBC's Geneva headquarters.

Hervé Falciani was responsible for upgrading client databases in one of the world's largest banks and the information to which he had access in October 2006 was priceless. The data, protected by Switzerland's sacrosanct secrecy laws, concerned millionaire depositers' accounts left to blossom over the course of years thanks to covert transfers and financial flows of doubtful, but untraceable, origins.

Then 34-years-old, the computer programmer had before him the list of thousands of bank deposits of foreign businesses and private citizens, placed safely in Switzerland to evade the tax authorities in their respective countries. It was one of the most significant tax evasion cases ever uncovered.

The following scene took place nearly six years later, in the port of Barcelona. On July 1, 2012, Hervé Falciani went to Spain by boat and an alarm bell went off during an identity check.

Branded a thief


An international arrest warrant was issued for Falciani, who is a citizen of Monaco with dual French and Italian citizenship, is married and has a child. Despite the fact his actions revealed thousands of cases of tax evasion all over Europe and some €10 billion in lost taxes were recovered, Bern considers him a criminal, a thief.

He has been arrested and, now, the Bellinzona Federal Tribunal eagerly awaits his return in order to prosecute him for theft of private data as well as for violation of the commercial secrets and banking secrecy laws. But first of all, Spain has to decide to extradite him.

Six intense years have passed between Falciani's incredible discovery and his arrest in Barcelona. During this time the computer programmer became a fugitive whose worth is measured by the value of the information he has at his disposal. He is a criminal who must be tried and incarcerated, according to those who want to destroy the data. But he is seen a sort of hero, a Robin Hood needing protection, according to those who would like to obtain it. Here is what happened in those six years.

After his October 2006 discovery, Falciani spent part of each work day downloading the suspicious data onto his laptop computer. He did this systematically for two years, without exception.

Arrested


Then on March 20, 2008, the Swiss Association of Bankers, a lobby group for Swiss financial interests, sent out a warning. On February 4, a man calling himself Ruben El-Chidiak, had gone to the Audi Bank in Beirut to negotiate the sale of data containing the names of clients of various Swiss banks. According to the Association, this information was obtained through theft. Banking secrecy laws, the pillar of Swiss identity, was under threat.

The police discovered that Ruben El-Chidiak was really Hervé Falciani. On December 20, 2008, Falciani and a colleague were arrested and questioned. Quickly released, Falciani settled the next day in Castellar, a village on the French Riviera near the Italian border. He was thus poised between the two countries of which he is a citizen. In this way he escaped Bern's clutches because neither France nor Italy will extradite one of their own citizens. Switzerland continued to request his return because it wanted to recover the data downloaded by Falciani, who, according to the prosecutor and HSBC, is guilty of theft.

Switzerland then issued an international arrest warrant for him. Yet, during this desperate pursuit, the Swiss authorities committed a serious error. They asked the French authorities to search Falciani's house, to seize his laptop computer and to send them his archives.

Tax treasure trove


On January 20, 2009 the French Nice assistant prosecutor called for a search of Falciani's family home. The routine operation turned into a remarkable find when 130,000 accounts of alleged tax evaders were discovered. The prosecutor opened an investigation, which is not aimed at the programmer but at the holders of the said accounts.

Word of the Falciani case got out and sparked a diplomatic crisis between France and Switzerland. Bern accused France of illegally keeping the stolen data. The government of [then-president Nicolas] Sarkozy for its part, threatened to have Switzerland added to the OECD Tax Haven Black List.

The media got hold of the case in August 2009. The French Budget Minister, Eric Woerth, announced that he had a list of 3,000 holders of Swiss bank accounts but without revealing the origin of the data. He asked that account holders make themselves known to the tax authorities in order to legalise their situation. This prompted 4,200 people to come forward to the tax authorities and France recuperated €1.2 billion in unpaid taxes.

The few names revealed in the French press led to a series of scandals, in particular the case of Patrice de Maistre – financial manager for Liliane Bettencourt, the main shareholder in cosmetics giant l'Oréal – as well as the cases of the heiress of Nina Ricci perfumes and of Jean-Charles Marchiani, a close associate of a former French Interior Minister, Charles Pasqua. Meanwhile, Switzerland continued to pressure France into handing over Falciani's laptop computer.

Caring is sharing


Paris finally agreed to the request in February 2010. However, before doing so, the prosecutor sent copies of the files, if they requested them, to all the countries with which Paris has tax cooperation agreements.

On May 24, 2010, the information communicated by France was already being studied at the headquarters of the Spanish tax office. The officials asked suspected tax evaders to turn themselves in and to pay their due, plus a fine. The amounts recovered in Spain thanks to the information downloaded by Falciani currently represents the most significant tax recovery operation in the history of the tax office. According to unofficial sources, more than €6 billion were recovered. The list contains powerful people such as Emilio Botín, CEO of the Santander Bank.

Other great names appear on the list sent to Italy. That list of 6,963 people includes fashion designers Valentino and Renato Balestra. In all, the Italian Treasury recovered some €570 million thanks to HSBC's Swiss accounts.

Motive mystery


There is still one remaining mystery. What were Hervé Falciani's intentions in downloading the files to his laptop computer? Did he wish to see justice done and to blow the whistle on the fraudulent practices of his company, as he has claimed from the beginning, or did he simply want to sell the data for a considerable sum of money as the Swiss justice department maintains? One can also wonder if Falciani has additional information and if he can still be useful in investigating further wrong-doing.

Just two weeks after his arrest, the United States Senate Permanent Subcommittee on Investigations published a report on the lack of control at HSBC regarding money laundering.

The list of Hervé Falciani's enemies – which already includes the Swiss department of justice; HSBC, one of the most powerful banks in the world; and thousands of tax evaders – may have to be expanded to dangerous criminal groups such as Al-Qaeda and Mexican drug cartels. He is conscious of the value of the information he holds. He knows that a headlong rush is his only option.



Well done that Man!!!! Pity there wasn't some brave soul working in the U.K. in a smilar job who can blow the whistle

on all the rich Tax dodgers.

26 August 2012 Last updated at 11:28








Unicredit 'in US Iran sanctions breach investigation'


Unicredit is being added to a long list of banks accused over the summer of breaking Iran sanctions
Continue reading the main story
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• Bank to pay $340m for Iran deals
  

Unicredit has confirmed it is co-operating with a US investigation into a possible breach of sanctions.

The bank is thought to have broken sanctions against Iran, according to reports by the Financial Times and Reuters, although this has not been confirmed by Unicredit.

The probe centres on a German subsidiary, HypoVereinsbank, which the major Italian bank bought in 2005.

The news follows similar revelations about two UK banks.

Unicredit originally admitted in January as part of a regulatory filing that it was working with US authorities over a sanctions breach, but without naming the country involved.

"A member of the Unicredit group is currently responding to a third party witness subpoena from the New York County District Attorney's Office in connection with an ongoing investigation regarding certain persons and/or entities believed to have engaged in sanctionable activities," the January filing said.

According to Unicredit's latest statement, which does not name Iran either, the investigation is also being conducted by the US Department of Justice.
Other banks
Last month the US Senate released a report detailing how HSBC helped launder money for Iran, as well as for other US-sanctioned governments of Burma and North Korea and for Mexican drugs cartels.

Then, earlier this month, Standard Chartered Bank - which is headquartered in London, but mainly active in the Middle East, Africa and Asia - agreed to pay New York regulators $340m (£217m) to settle claims that it had concealed $250bn in transactions with Iran.

Continue reading the main story
Who is under scrutiny?



Banks around the world are facing allegations of inter-bank rate rigging, lax anti-money laundering controls and contravening economic sanctions. But which banks are in the frame, for what - and by which regulators?

• Global banking scandals explained
  
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• HSBC report: Key findings
  

Meanwhile, Royal Bank of Scotland is also understood to be facing investigations into whether it has broken sanctions against Iran.

The bank would not comment, but confirmed that it had voluntarily approached US and UK officials with information after an internal inquiry uncovered possible infringements.

Press reports earlier this month suggested that Germany's Deutsche Bank is also being investigated by the US Treasury's Office of Foreign Assets Control, the Federal Reserve, the US Justice Department and Manhattan's district attorney's office for alleged infringements of US-Iran economic sanctions.

Deutsche Bank refused to comment on the reports.

Sanctions regime

Iran has been subject to US economic sanctions since 1979. The current system operates under the US Treasury Department's Office of Foreign Assets Control.

The sanctions were toughened in 1997 by then-President Bill Clinton, who signed an order for sanctions that prohibited "virtually all trade and investment activities with Iran by US persons, wherever located".

Under US criminal law, violations of the Iranian Transactions Regulations may result in a fine up to $1m and/or jail for up to 20 years.

As part of the sanctions regime, until 2008, banks in the US in some circumstances were allowed to undertake so-called U-turn transactions with Iranian financial institutions.

Those U-turn transactions move money for Iranian clients among non-Iranian foreign banks, such as those in the UK and the Middle East. They are cleared through the US, but neither start nor end in Iran.

To ascertain whether these transactions are permitted, US clearing banks use the wire-transfer messages they get from banks, using the SWIFT payments system.

If the banks do not have enough information to make the call, they are supposed to freeze the assets.

The allegations involving Standard Chartered and HSBC both centred on U-turn transactions.

Standard Chartered was accused of stripping the messages of data that showed the clients were Iranian, replacing it with false entries.

The UK-based bank said that not only did "99.9% of the transactions" relating to Iran comply with U-turn regulations, but that the total value of transactions that did not comply was under $14m - converse to the $250bn worth of Iran transactions US regulators said it had hidden.

In July, a US Senate Committee found that HSBC carried out 25,000 transactions totalling $19bn that were connected to Iran between 2001-07, which it suggested was evidence that the bank may have broken economic sanctions.