HSBC got fined about half that when they caught laundering money for the Mexican cartels a few years back. True story: HSBC had to design special teller windows because the standard ones were too small to fit the sacks of money that were being brought in and laundered. If you want to know why these guys don't go to jail, pull up a bottle of lithium and sit down with The Chickenshit Club.
Also: in the US, I've heard the "value of saving a life" for some decision calculations to be assumed at ten million dollars. That's $200k per year for 50 years. (In New Zealand, from talking to some civil engineers, it is a lot lower.)
At the American price, the fine is worth 420 human lives.
They were also fined 50000 to 300000 euros personally (they have to pay as private citizens, it's not part of the 3.7B euros fined to UBS).
Not completely full, but also not completely empty.
Jail time would be the only real punishment. They take very calculated and rewarding risks. If they don't get caught they walk away with many millions. If they get caught they walk away with many millions minus a few k.
Technically this is a "sure bet".
They were fined $1.9 billion.
Not "fined about half"
Sure prison would be nice, but 4.8 billion dollar is very far from "a slap on the wrist", it it more than half of their yearly operating income worldwide.
Literally no one went to jail for the crimes of 2007-2008. No one went to jail for laundering money for the cartels, no one went to jail for Libor scandal, and no one went to jail here. Yet if you walk into McDonalds and rob it of the amount in the cash register, you could go to jail for many years
It does show a lack of controls in place, though.
Also if the article is right in that this was affected by the protests, then that is a big win for protesting.
There are many factors that could be influencing price, but if we attribute this 4% delta entirely to the announcement, the market is guessing the actual penalty will amount to $1.84B. This could be bc the market thinks UBS can appeal with a 50% success rate, or can negotiate the penalty down by 50% with high certainty.
Edit: I hadn't considered tax implications. If UBS is able to deduct these penalties pre-tax (which I'd assume they would), then it suggests that they are very likely going to have to pay the full penalty. Of course, this is all guess work. e.g. the market could be scared that this sets a precedent for future additional penalties which would decrease the signalling towards full payment on this penalty.
Secondly, and it depends on the jurisdiction, but penalties and fees associated with wrongdoing generally aren't tax deductible.
The US clarified this during the TCJA but most countries agree: https://www.clearyenforcementwatch.com/2018/02/1962/
No, the market’s guess is $1.84B higher today than it was yesterday. The latter likely isn’t zero, as https://en.wikipedia.org/wiki/UBS_tax_evasion_controversies#... states ”In July 2014, the bank was required to post a bond of 1.1 billion euros, which UBS complied with while making multiple appeals in the French court system, finally losing its appeal at the Cour de Cassation, France's highest court”
That was 10 years ago, and and it's still being argued in court. I can very well see this being another delayed settlement that will drag on for another decade or more.
That would be more costly than paying whatever is due after exhausting legal appeals.
There's a spectrum for this sort of thing, and I think UBS was clearly on the 'knowingly profiting from crime' side of it.
They were cold calling the customers accross the border, not closing their eyes on the paperwork associated with the money.
Just like bits have no color for you[1] dollars had no color for bankers for a long time. Stopping money laundering in your organization is just as much pain as stopping copyright infringement on your system.
> The judges’ move followed a failed plea bargain between national financial prosecutors and UBS representatives, the first time such an out-of-court settlement was tested in France. French magistrates reportedly offered UBS to settle the case for 1.1 billion euros ($1.2 billion), after considering an initial deal of 2.2 billion euros ($2.4 billion). - 2017
However the basis was
> The assets illegally concealed by French clients in Switzerland between 2004 and 2012 allegedly amounted some 10 billion euros ($10.75 billion).
Another quote puts it at $600billion[2]
I'd love to know the definition of "illegally concealed" in these circumstances
The chances of it being reasonable I'd consider very slim; France is not a reasonable country nor is it run by reasonable people. France is a failing protection racket running out of people to shake down, by and large. When the people who run the socialist party government budget are offshoring their wealth - perhaps your country is fundamentally broken.[3]
[1] https://www.apnews.com/2c7032c7d75a40728395587fd917517e
[2] http://www.ipsnews.net/2012/04/europe-loses-billions-to-tax-...
[3] https://www.bloomberg.com/news/articles/2015-02-17/three-ex-...
Edit: Downvotes without comment. Not exactly productive conversation.
America has some problems, but there's a reason why they have a GDP 40x larger than France with only 5x the population.
In fact, the GDP per capita is 100$ less than that of the UK, and more than that of, for example, Japan or South Korea.
Also of note may be that France, unlike the US, does not dispose of oil resources, which makes comparisons not quite as simple.
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...
If 2008 taught us anything it is the fact that big banks don't "go under" because they are considered "too big to fail" and as such will not be allowed to fail.
The German term for this is "systemrelevant", (systemically important) which imho fits way better than "too big to fail" because it's way blunter.
EDIT: Actually fine is €3.7 + €800m in damages.
