What on earth is going on in the world of banking?
BBC News reported yesterday that Lloyds has agreed to pay a penalty of $350 million to the US authorities.
Neville Hobson has written a fantastic blog post which I urge you to read.
“The US Justice Department said Lloyds TSB had acknowledged “criminal conduct” and agreed to forfeit the funds in return for an end to its investigation. Prosecutors said the bank faked records so clients in Iran, Libya and Sudan could do business with US institutions. Lloyds TSB said that it had cooperated fully with the probe.
According to court documents, beginning as early as 1995 and continuing until January 2007, Lloyds, in both the United Kingdom and Dubai, falsified outgoing U.S. wire transfers that involved countries or persons on U.S. sanctions lists. Specifically, according to court documents, Lloyds deliberately removed material information—such as customer names, bank names and addresses—from payment messages so that the wire transfers would pass undetected through filters at U.S. financial institutions. This process of “repairing” or “stripping,” as Lloyds commonly referred to it, allowed more than $350 million in transactions to be processed by U.S. correspondent banks used by Lloyds that might have otherwise been blocked or rejected due to sanctions regulations or for internal bank policy reasons. According to court documents, the criminal conduct by Lloyds was designed to evade, and to assist its customers in evading, U.S. economic sanctions imposed against Iran, Sudan and other countries.”
It seems once again that it’s all about the money!