Let’s do the perp walk again

On a flight to Stockholm this week, the man next to me asked what I do, and I explained.  “Well, it’s certainly your moment!” he said.  And with Standard Chartered and HSBC in the headlines at the moment, I had to agree.  I don’t take particular pleasure from their failings – although I do read all reports avidly for training titbits, and note down ideas for future MLRO workshops.  (I may be wrong, but I think that all regulators – no matter their sector or their jurisdiction – keep a close eye on each other, and once one has issued a finding that stresses a particular area of concern, all the others then add that to their list of things to check.)

And I don’t think that larger and larger fines – or penalties, or settlements, or whatever you want to call them – is having much effect.  For a start, financial penalties hurt the shareholders more than anyone, which doesn’t seem quite right.  What I fear we need to see is the return of the perp walk: responsible executives being led from swanky head offices, maybe even in handcuffs.  It had a miraculous effect when Enron and Andersen individuals were held responsible for their frauds.  And I don’t buy all of this “it’s old news, we’re the new guard” stuff.  Why not go after the old guard, then?  They’re still alive, if not still in post – and, as a documentary showing tonight on ITV will explain, they will have plenty of company inside, with pensioners now making up the fastest-growing age group in British jails.  So I think we should have fewer fines and more prosecutions: after all, if due diligence means going behind structures to find the responsible individuals, surely that is the standard that should be applied to – as well as by – financial institutions.

Quick update: An interesting letter appeared in the Economist on 5 January 2013 – scroll down to the one entitled “Prosecute the bankers.”

This entry was posted in AML, Due diligence, Money laundering and tagged , , , , , , . Bookmark the permalink.

5 Responses to Let’s do the perp walk again

  1. Pingback: Let’s do the perp walk again

  2. Some comments by the BBC’s Robert Peston (and his readers) on just this subject: http://www.bbc.co.uk/news/business-20757032

  3. Graham Thomas says:

    Hi Susan

    I couldn’t agree more. It always seems odd that firms are allowed to “settle” a wide range of serious and significant AML failings by simply paying a large fine. Whilst the size of some of these fines should make people sit up and think, it does also seem to dilute the severity of the failings, which are often around fundamental AML principles, and it’s not really surprising when yet another case comes along. I’m sure that it can be fiendishly difficult to apportion specific individual blame within large multi national companies but I would have thought that more could be done.

    Anyway, enough of my moaning from the safety and comfort of my office chair. Wishing you a very merry Christmas, (hopefully with lots of chocolate involved). I look forward to more of your thought provoking and witty insights next year.


  4. Hi Graham

    Many thanks for your comment. With regard to the difficulty of apportioning specific individual blame, someone commented on the Robert Peston story that banks seem find it easy enough to know where to send the bonuses, so why are they so confused about where to send the police?!

    I too am hoping for a large chocolate delivery over Christmas, and look forward to writing plenty more blog posts in 2013. Merry Christmas to you.

    Best wishes from Susan

  5. Pingback: If you can’t stand the heat… | I hate money laundering

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