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  1. Wealth
December 17, 2012

Bankers, Not Just Banks, Should be Punished for Incompetence and Recklessness

By Spear's

We can learn from Kweku Adoboli’s case, and hold individuals, and not just banks, accountable for their actions starting with HSBC

IT HAS EMERGED that Mexican drug traffickers used HSBC accounts to launder at least £881 million in drug trafficking money, using a scheme known as the black market peso exchange (BMPE).

The bank has received an appropriately hard slap on the wrist and has been fined a record £1.2 billion for its failure to adhere to anti-money laundering legislation. But why haven’t any individuals at HSBC been held responsible for such disgraceful behaviour and incompetence?

Singling out individuals in banks for incompetence or recklessness is a rare occurrence in this country, but it sends out a much stronger message than simply handing out a fine, no matter how enormous it might be. We do, at least, have a very recent precedent in this respect, and it should be taken notice of.

Kweku Adoboli’s case was fascinating. Eventually sentenced to seven years in prison for racking up losses of over £1.5 billion at UBS over three years, Adoboli was painted by the prosecution as a greedy, irresponsible gambler who deliberately and – it has to be said – skilfully, hid off-the-books trades from his bosses and made up clients.

The prosecution barrister Sasha Wass said that Adoboli – who wept in court as the case was brought against him – could have brought the Swiss banking giant to its knees had he carried on.

The defence tried to portray Adoboli as a talented, conscientious young banker who was led astray by a deeply ingrained culture of risk taking at UBS, and was under constant pressure from his bosses to push the boundaries.

Kweku Adoboli was sentenced to seven years in prison for rogue trading

The email he sent on the day he walked off the trading floor at London’s UBS office, realising he had run out of luck, apologised profusely for the ‘shit storm’ he knew was coming his way.

It is encouraging, then, that none of this fooled the jury, and that the prosecution won. His sentencing sends out a powerful message to the banking community: that there are serious personal repercussions for such behaviour. A massive fine, handed to the bank as a whole, can never send out this message.

HSBC will not feel the dent caused by their fine for long and, though their head of compliance has quit, no doubt some of the individuals who were responsible for allowing the money laundering are still in office. HSBC’s chief executive Stuart Gulliver has said he is ‘profoundly sorry’ for what happened: is that really enough? 
Read more from Mark Nayler

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