Too Big To Jail

33 | By Shah Gilani

The opening line of a December 11, 2012 New York Times editorial on federal and state authorities choosing not to indict HSBC for money laundering reads: “It is a dark day for the rule of law.” It may be a dark day for the rule of law, but it’s business as usual for the banks.

America’s heralded and frighteningly powerful Department of Justice, along with all of the not so heralded or frightening banking regulators, simply refused to prosecute Britain’s biggest bank out of fear of “collateral consequences.”

In other words, they’re “too big to prosecute.” That’s what Andrew Bailey, the chief executive-designate of the Prudential Regulation Authority, said about the usual deferred prosecution agreement that accompanied HSBC’s $1.9 billion fine. The Prudential Regulation Authority is set to replace the U.K.’s Financial Services Authority – the country’s current toothless watch dog.

It’s just another example of too big to fail and too big to jail.

Deferred prosecution agreements and hefty fines levied against the world’s TBTF banks have become commonplace. Still, there are relatively few criminal charges, just wrist-slapping, don’t-do-it-again fines and public spankings.

It is a dark day for the rule of law because the money cloak has effectively been cast over all things having to do with justice.

Let’s call it what it is: buying immunity.

The world’s biggest banks are too powerful, too intertwined, too “systemically important”, and just plain too rich to be challenged.

Regulatory “authorities”, along with the most powerful global policeman the world has ever known all shake in their boots when they have to apologize to their bankster masters for putting on a show for the public. But the law is the law and the law apparently needs publicly orchestrated payoffs.

Let’s put aside for the moment the corporations themselves and their extraordinary ability to make billions of dollars and laugh behind closed doors at having to pay fines that they can more than cover by the end of the following quarter…

Let’s put aside for the moment the fact that those fines are paid, not by insurance policies, not by executives or traders or any of the individuals that commit the crimes, but by shareholders…

And let’s put aside for the moment the fact that banks make so much money that they can buy off stupid shareholders by always offering dividends and stock buybacks (that’s like to luring them back to be set up and knocked down again like bowling pins).

We’ll put all of that aside, just for a moment, and talk about the guilty individuals…

No banking executives or traders or salesmen ever go to jail for the “systemic” banking crimes they commit. Don’t you think that’s part of the problem?

There is a travesty of justice as the laws are constantly trampled on by the individuals who commit these crimes – not the nameless, faceless corporate entities that publicly take the blame and pay the fines.

Now our moment is up. We can’t put aside anything that the banks do, as corporations, because that’s where the individuals hide.

Banks that are too big and too powerful and far too dangerous should be dismantled. There should be safety measures to ensure that the banks work for the betterment of the people who expect them to protect the fruits of their life’s labors and their business and entrepreneurial endeavors.

People should expect to be able to borrow their own money safely, while the banks put that money to work for the benefit of the depositors.

People should not have to worry about how they’re getting ripped off or how the banks are subjecting the global economy to crisis after crisis only to be bailed out again and again.

Here’s my Christmas wish, plain and simple: Prosecute all the criminals at all the banks and send the guilty parties to jail after they are stripped of their ill-gotten riches. Then break up all the too-big-to fail, too big too jail banks into bite-sized pieces that no watchdog would ever have trouble eating.

Is that too much to ask?

I’m leaving extra homemade cookies and a gallon of milk (in an ice bucket) right in front of my fireplace. If they’re gone on Tuesday morning, I’ll let you know.

Merry Christmas, Happy belated Hanukkah, and Happy Holidays to all of you good little boys and girls. As for the rest of you…you’re on your own.



33 Responses to Too Big To Jail



  2. Kevin Beck says:

    I’m doing my part, Shah, And if I rattle the cage of some government apparatchik, then so be it. Those lazy bums that can’t see the problems they create for law-abiding people are not just worthless; they’re worth less than zero.

    And none of their bankster masters deserve a break for their own law-breaking. I am happy just reducing my use of the banking system to as small a footprint as possible. Every month, after paying my expenses, I just take the leftovers (otherwise known as “savings”) and remove them from the government-sanctioned financial system. I know this can’t be done by everybody, but I want as few assets as possible to be denominated in currency units and stored with the barbarians of wealth.

    I’d rather be too small to worry about, than be too big to jail. After all, if there’s regime change, the new boss can help someone else take your place.

  3. PHILLIP says:

    iT’S THE PRIME EXAMPLE OF THE BIG COMPANY RUNNING THE COUNTRY. What government we thought we had is going by the wayside. Polititians have too many of their personnel lives in big businnness and that is in direct conflict to do what good for the country,or whats good for them.If this trend is allowed to continue Corperations will be the Government. God help us all.

  4. Ron says:

    Great Article, Shah. All very true and sad for the fact that this seems to be “by design” and not at all a worry to regulators. I had a very interesting and upsetting incident involving HSBC several months ago. I have a “Discover” credit card and was informed in April, 2012 that Capital One had bought Discover and several other credit issuing banks, and they would be our new Credit Masters as of May 1st. Like clockwork, on May 1st I had a telepay withdrawl from my bank account, unauthorized by me. I did not even have a Capital One account, except for the takeover of Discover. So, the bad news was I had not checked my bank account for almost 2 weeks due to a computer problem. I am used to having a monthly bank statement as in the “old days.” In all the years of banking, I never had a bit of fraud involving any bank or credit card. I had my entire account drained in that 2 week period! I caught it on a Friday when I went to withdraw money and what a shock I got! So, I immediately closed the account and signed affadavits that denied any authorization for these transactions. When I had the bank print out a statement, all 7 of the fraudulent transactions were “pay by telephone” or “telepay” type ACH (Automated Clearing House) transactions. I never use this type of payment. I essentially was out $4,300 for almost 5 days until they put the funds into my new account. THE POINT of all this, Shah, is that I tried to “Opt Out” of these types of transactions. But, I could not! This is because the banking system lumps these into the ACH Transaction category, so I would have to opt-out of ALL ACH transactions….essentially that would be all my online payments and automated payments I have!! So much for online banking convenience! In the course of doing my own investigation, with folks like LifeLock included, there is no way to protect oneself from this fraud! You will Always find out After it has Happened!!??!! Is that a crazy design for this system or what?!?! And, what else I learned was even scarier: for these telepay / pay by phone transactions to occur, all a thief needs is the basic information available on any check! YES! Account Holders Name / Name of the Bank / Routing # / Account #, then swear on your Scout’s Honor you are the legitimate account holder! I could not believe how stupidly simple this is! SO, with all the fraud in the banking system going on, I have just about come to the incredible and bitter realization that this is By Design! Perhaps to justify some kind of new National ID System or whatever….but, with fraud so easy to implement, and law enforcement placing these in a very low priority for investigation, I just feel someone needs to warn people! Anyway, I appreciate your newsletter and the great insights you have…..Happy Holidays and let’s pray 2013 is a good year for all! Regards, RW

  5. Bruce Montogmerie says:

    I could not agree more….If necessary, the law should be changed to make the individuals, as high up as the criminal acts go, responsible personally and subject to trial and punishment. We need to stop giving corporate criminals a pass. People made these decisions, did the deed and can do the time. If a few bankers joined Madoff, maybe the rest will think twice before hiding behind the corporate veil to commit fraud.

    Of course, we would still need a Justice Department with some stones and the good judgement to go after the real bad guys and send them to jail.

  6. michael trupei says:

    What was the money factor at HSBC’s, in other words how much money was laundered through its system? This is important for two rasons: 1. for the sentencing determination, which in this case was deferred in lieu of 1.9 billion fine, and 2. for the purposes to institute civil or criminal forfeiture, which the former is filed after the convictions of banksters. The banksters and many corporation are continuous criminal enterprise and shall be charged under 848 USC, to say the least.

  7. RUSS SMITH says:


    Let’ see now: Shah is trying to pretend to himself that we are still operating a capitalist economy where the ruleof law within a capitalist society disciplines offenders but, under the practices of socialism which the Shah has been teaching us, the Nanny State Makes up all the rules doesn’t it? You’ve heard of seperation of Church & State? Well, we are geting our teachings about the seperation between Captalism vs. Socialism aren’t we? What we are learning is that the old fashioned capitalist methods have been outdated by the new Socialis agendas which prevail nd what better way to grogram the masses than to allow US to learn that OUR Socialist leaders’ favorite cronies are untouchables and get tol earn this time and time again add infintum? Do you really think, Shah, that OUR Nanny State is going to prosecute their best friends that keep them afloat with deficits that the poor old latter day Capitalists have to pay? Come on guy have a little understanding for OUR true condtion and not the old, long forgotten fantasies inherent in Capitalists’ thinking. Grow up & serve your new Masters like a man!! After all, if we can’t govern them it’s because they are governing US right? Do you really think AIG cares how it got its’ billions in bailout money from its’ true friends in the Government and the Federal Reserve System? They got theirs & Mr. Punyman where’s yours? We Capitalists are just hob nob compainers to them. Shah, you can’t win a no win war here can you?


  8. ray says:

    It is too much to ask. The Department of Injustice (DOI) headed by Holder who should be indicted for murder. There are two separate rules of law: one for ordinary citizens and one for the moneyed interests/politically connected.

    And then a Government run by executive order – what would that be called in earlier times?

  9. James says:


    When the corruption starts and ends at the very highest levels of world governments, what are the peoples who must do something with the little monies they have left to fund their daily lives. The banks cheat, lie and steal, then share the booty with the very governments that are responsible to enforce the laws that they write, we find ourselves up against a world-wide corruption that is beyond understanding and beyond the rule of law, as you have so well indicated. The greatest issue is that so many of the peoples appear to neither care or have no desire to know anything except “when does my next welfare payment arrive”!

  10. Donald Teets says:

    Luv ya Bud,
    Keep up the great work… I am certain you speak the language of the majority…and you tell us what we need to know.
    If only we could agree on what to do with this knowlege.
    Merry Christmas Shaw Galani

    Please do not go away,,,we need you

  11. Kenneth Groeppe says:

    I wish we could get the politicians to realize the damage they are doing to our whole system. The whole thing is collapsing, and these guys are trying to grab all the marbles. I doubt that they would want to live in the world they are creating, but they are too stupid to see the end results.
    Actually the preoccupation with wealth at any cost to others is an addiction. I wonder if we could force them to go into rehab.
    My conclusion? Since the politicians are almost all lawyers and lawyers are the most stupid people on earth, I guess we are getting what we deserve. If Americans were more intelligent, they would realize that lawyers aren’t playing with a full deck, they might be inclined to get rid of them. By the way, lawyers have only 26 cards in their deck, and they are all jokers.

  12. Skip Canevit says:

    Banks are a necessary evil, with emphasis on the evil

    No one outside of the TBTF Banks would go unpunished. None of us would even come close to getting away with what these behemoth monopolies are able to get away with.

    No one is willing to stand up and say enough is enough! It is enough and unfortunately if the DoJ and the rest of the regulators globally are afraid to do something, it has become obvious who is running things. It is not the sovereign nations, it is not the military industrial complex, it is the banking industry.

    In the trade industry where we do most our work, we have personally seen corruption around every corner in this industry. I was actually deluded into thinking after the $1.9 B fine that something was actually starting to happen. Guess, I drank too much koolaide.

    The only problem is, one way or another, you have to use a large bank if you do large trades, commercial transactions or development projects. And ‘there is none righteous, no not one..

  13. Joe Ball says:

    I think that instead of a meaningless monetary fine, the penalties should be ” you have 2 years to sell off or close down 50% of your assets” every time they participate in one of these scams.
    Maybe an even better fine would be Chapter 7.

  14. Peter King says:

    I can’t wait for public justice to work in the inevitable downfall of JPMorgan – the criminal bank of the century. Their crime, the constant manipulation of the price of silver, will be their undoing. Jamie Dimon may not end up collecting trolleys for Walmart, but he will ultimately be recognized as the coordinator and master mind behind the continuance of the Bear Sterns silver manipulation racquet they inherited. Simple supply and demand ends all manipulation and the end of the silver manipulation will be of epic proportions. Of course, no-one will see prison bars from the inside, but they will be exposed as criminal frauds when the JPM empire explodes. I for one, can’t wait!

  15. Kevin Donnelly says:

    We wonder why Banks don’t play by the rules
    And the DOJ will not do it’s job
    But each believe that people are fools
    They get the corn and we get the cob

    They know we can’t force them to do what is right
    They cover up every unspeakable crime
    they have money to burn, they have power and might
    While we fight each other ,most of the time
    So let’s get together, and let’s take a stand
    To renew independence, across this fair land

  16. ron says:

    Shah, Thank you for stating so eloquently what should be done with the banksters. You articulated your comments precisely how many of us out here are feeling. I hope the milk and cookies are gone before Tuesday morning. ron

  17. Charles says:

    Shah, what would you think about publishing one of these letters, with as many stories of corruption as you can think of, and allowing all of us to forward copies to the White House, and to our state senators and representatives, along with a demand that something be done to address these issues? Or maybe better yet, sending each one individually that you publish, so that our “leaders” are agitated over and over again? Maybe if they see a ground swell arising, they might be pressured into action.

  18. Tom Dissinger says:

    Just another in a long list of reasons, a LOT of red-blooded Americans are busy burying a Lot of things in their back yards.

  19. stuart j. says:

    you are all “CRAZY” we live in a world so different than the one we all grew up in. today the only thing that matters is how much money you make whether legally or ILLEGALLY and how you can INFLUENCE the morons in Washington.

    the only rule of law left is what KING “O’;BOMB’A wants. he has committed more crimes while in office than any other recent president. he continuously disregards the CONSTITUTION, CONGRESS and the SENATE making decisions which only help the people he wants to help.

    GOD BLESS AMERICA and make it’s people smart enough to elect people who care about the country.

    thanks Shah for your continued good work

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