HSBC shanghai'd in Bernie Madoff fraud

Madoff with their money!

Banking is a murky world. HSBC started off life in the city streets of both Hong Kong and Shanghai. It may be a case of "you can take the bank out of Shanghai but you can't take Shanghai out of the bank". I don't know about that. What I do know is that I read in the Daily Mail that HSBC is being sued for £5.7billion for its role in the massive fraud by Wall Street swindler Bernie Madoff. HSBC is accused of creating and maintaining an international network of a dozen feeder funds based in Europe, the Caribbean and Central America that provided the money to help finance Madoff's 'Ponzi' sheme.

HSBC vigoruosly denies the accusations against it. However, what concerns me is that the vast bonuses paid out to bankers in London must have been as a result of creating feeder funds, if not these particular ones. The more that so-called investment banking is put under the microscope the more one finds a lot of things crawling about. Surely we need transparency? Or am I totally naive?

It is claimed that the bank was advised at least twice that there were irregularities. KPMG identified 25 'fraud and operational risks' in 2006 and 28 risks in 2008, according to copies of reports obtained by Bloomberg. HSBC says it 'did not know a fraud was being committed and lost $1bn of its own assets as a victim'. Well, someone isn't being straight.

The one good thing about the internet is that this sort of activity can be exposed for further scrutiny. Piercing scrutiny is the only thing that reveals the truth these days. HSBC is either a victim or it is something else. Either way, it has not been, in this case, very diligent and it begs the question whether those in charge are worth their vast largesse.

Read more: http://www.dailymail.co.uk/news/article-1336360/HSBC-sued-5-7bn-failure-spot-Bernie-Madoff-fraud.html#ixzz1H3CxrBM2

Posted in: banks,Bernard Madoff,HSBC,KPMG