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Current Law Students / Re: Should I file Bankruptcy...
« on: December 09, 2006, 09:46:58 PM »
Financing Plants in Iran

In March 2002, it agreed to be the lead arranger of a $155 million credit to help build an ammonia and urea plant for Iran's National Petrochemical Co. In February 2003, HSBC agreed to provide NPC a $108 million export credit to finance equipment and services to construct a petrochemical plant. In July 2004, Iran Khodro Industrial Group, the country's biggest maker of cars and trucks, selected HSBC and BNP Paribas to manage a sale of 300 million euros in bonds. Khodro, which is 40 percent owned by the Iranian government, hadn't sold the bonds as of April. In August 2004, HSBC's Tokyo office joined with ING Groep NV, the biggest Dutch financial services company, and Japan Bank for International Cooperation, Japan's export credit bank, to provide a $154 million loan to NPC to finance imports of Japanese equipment and services, according to the Japanese bank, which lends money to help sales of Japanese products abroad. HSBC also has clients in Syria, the other country the U.S. singles out as among the worst of the designated terror states.

Lebanese Office

"Through the Lebanese office of HSBC, there is business done with Syrian entities," HSBC spokesman Martin in Dubai says. Syrians opening accounts have to meet the bank's standards of acceptability and go through the same identification checks as other HSBC clients, he says. HSBC does additional Syrian business through London-based British Arab Commercial Bank Ltd. HSBC owns 46.5 percent of the bank, whose chief executive officer is an HSBC employee on loan. HSBC holds five of the 11 board seats. Other shareholders of British Arab Commercial Bank, known as BACB, are the Libyan government's Libyan Arab Foreign Bank, with 25 percent, and Iraq's state-owned Rafidain Bank, with 4.91 percent. Libyan and Iraqi representatives sit on BACB's board alongside HSBC bankers. During Saddam Hussein's rule, an Iraqi representative traveled from Baghdad to London for some board meetings, according to BACB. BACB is a corner of the HSBC empire that specializes in doing business legally with countries that have been marginalized by sanctions, BACB General Manager and Deputy Chief Executive Mohamed Fezzani says.

'A Small Bank'

"We are a small bank, and we know exactly what we are doing," Fezzani, 67, says. "As long as we don't finance the wrong stuff." BACB's Web site calls these "niche markets," listing Iran, Libya, Sudan and Syria along with other countries that aren't on the U.S. terror list, such as Algeria and Morocco. Leaflets promoting BACB's activities in Syria and Libya are displayed in the lobby of its London headquarters on Mansion House Place, a six-story modern cement building decorated with stripes of brick, nestled behind the 250-year-old official residence of the lord mayor of London. HSBC does its Sudan business through BACB, Martin says. BACB also provides HSBC with a base in Libya; HSBC's Web site lists the BACB Tripoli office as its address in that country. "We are their representatives in the countries where they have no presence," says BACB's Fezzani, whose corner office on the top floor of BACB's headquarters overlooks the Bank of England.

Sudan and Syria

Among BACB's clients, he says, are Commercial Bank of Syria, which the U.S. Treasury says has been used by terrorists; the Central Bank of Syria; Sudan's Kanana Sugar Co.; and Bank of Khartoum, a Sudanese state-owned bank undergoing privatization. Fezzani, a Libyan posted to BACB in 1975 by Libyan Arab Foreign Bank, says he, BACB and HSBC take measures to make sure none of the financing BACB provides is misused. BACB has a rule against financing weapons or anything related to the military, he says, and HSBC, as the biggest shareholder, provides legal help to keep the bank in compliance. BACB also hires a cargo inspection contractor to do spot checks of imports it finances to make sure countries such as Syria are actually buying what they say they are. Fezzani points out the window toward the Bank of England, which has been one of BACB's regulators. "They had a sanctions committee that came to examine us and found everything perfect," he says.

Enforcing Sanctions

Bank of England spokesman Peter Rodgers confirmed the central bank had audited BACB and said he couldn't discuss the outcome. The Bank of England helped enforce U.K. and UN sanctions against Libya and UN sanctions against Iraq. In the U.S., HSBC's business dealings -- like those of dozens of other banks including New York-based Citigroup and JPMorgan -- have fallen afoul of sanctions. The U.S. Treasury Department has fined at least 104 financial services companies for more than 300 transactions related to terrorists and terror sponsors since the beginning of 1998, according to a Bloomberg News analysis of Treasury documents that detail fines. The Treasury disclosed the records, which include copies of Treasury's letters to the companies, in response to a Freedom of Information Act lawsuit by Public Citizen, the consumer group founded by Ralph Nader, and the Corporate Crime Reporter newsletter, both based in Washington. Banks say most penalties stem from employees accidentally allowing money transfers to companies, people or countries blocked by the U.S. In some cases, banks voluntarily disclose the transfers after discovering the mistakes.

Modest Penalties

The maximum civil penalty per violation is $11,000 under Iran, Sudan, Syria and terrorism sanctions, according to a Treasury Department fact sheet, and they're often negotiated lower. That provides little deterrent, Arizona Treasurer David Petersen says. "Some of the fines are so puny it's laughable," the 55- year-old Republican says. The biggest banks have the greatest number of fines, according to Treasury records. Citigroup, the biggest U.S. bank, paid at least 22 fines from the start of 1998 to April 2005. JPMorgan, the No. 2 U.S. bank, had at least 32. Bank of America Corp. had at least 19, and Wachovia Corp. had at least 24. Both banks are based in Charlotte, North Carolina. American Express had at least 10. "We handle millions of international transactions, and occasionally, an inadvertent human or system error occurs," says Shirley Norton, a spokeswoman at Bank of America. "As soon as we become aware of such an instance, we voluntarily report it."

Fined 18 Times

The Treasury Department has fined HSBC at least 18 times under terror-related sanctions since the start of 1998. One penalty was for a transfer in April 2000 of $100,000 benefiting the Taliban, which at the time was running Afghanistan and providing bin Laden and his al-Qaeda organization with the base from which he plotted the Sept. 11 attacks. Some U.S. regulators say HSBC's controls are inadequate. In April 2003, HSBC Bank USA agreed with the Federal Reserve Bank of New York and the State of New York Banking Department to improve its system of monitoring incoming and outgoing fund transfers for suspicious activity, according to the New York Fed. The agreement said there were "deficiencies" in the bank's anti-money-laundering policies and procedures, customer due diligence practices and internal controls. "We are taking a number of steps to upgrade our systems and procedures," then HSBC Bank USA Chief Executive Youssef Nasr said in a statement at the time.

Selling Shares

Petersen says he's taking action, too. In April, he sold $5 million of bonds issued by HSBC's Household Finance, partly because of HSBC's business in terror-sponsoring states. He also declined an opportunity to buy American Express shares in April at a "good" price because he wants to know more about the company's businesses with terror-sponsoring states. "I do not want to have any of our investments in companies that could possibly aid and abet our enemies," he says. The government isn't taking the companies to task, Petersen says, so he -- and dozens of other state fund managers -- are creating their own accountability.

Current Law Students / Re: Should I file Bankruptcy...
« on: December 09, 2006, 09:46:31 PM »
Legal Business

Martin says HSBC would never have knowingly banked for Hussein, who was under United Nations sanctions, and adds that HSBC hasn't found any evidence to support the 2004 finding by the CIA's chief weapons inspector that Hussein's regime deposited money at an HSBC branch in Amman, Jordan. HSBC's businesses involving Iran, Libya, Sudan and Syria are legal, Martin says. "Syria, and in particular, Iran, continue to embrace terrorism as an instrument of national policy," State Department Counselor Philip Zelikow said at an April 27 news conference in Washington for the release of the government's annual Country Reports on Terrorism. He said Iran and Syria have the ability to make weapons of mass destruction, and they support Hezbollah and Palestinian groups the U.S. says are terrorist organizations. Iran has also been unwilling to deliver to the U.S. or a third country senior al-Qaeda members detained by Iran who were involved in planning the Sept. 11 attacks, he said. Frederick Jones, a spokesman for the National Security Council at the White House, said he couldn't say why the Bush administration allows companies to do business in the U.S. that are also in terror-sponsoring states. Two spokespeople at the State Department, Steven Pike and Carol Thompson, also said they were unable to answer that question.

Local Crackdowns

If the federal government won't crack down on companies such as HSBC that do business in Iran and the other countries accused of backing terrorism, state and city officials say they will. Thompson says he may ask HSBC to disclose or even cut ties to Iran and the other U.S.-designated terror-sponsoring states. Thompson, a Democrat, has won similar concessions from other companies. Chicago-based Aon Corp., the world's second-largest insurance broker, agreed in March to review its ties to Iran after Thompson submitted a shareholders' resolution. Aon, which occupied six floors of the World Trade Center's South Tower and lost 176 employees in the attack, has two Iranian subsidiaries, Mahamy Co., known as Aon Iran, and United Iranian Insurance Services Plc, according to Aon's 2004 annual report. Halliburton Co., the oilfield services company once run by Vice President male private part Cheney, pledged to Thompson in March not to seek new work in Iran, where it used an offshore subsidiary to conduct business.

GE Responds

Thompson has also filed shareholder proposals with Fairfield, Connecticut-based General Electric Co., the world's largest company by market value, which said it would stop seeking new business in Iran, and Cooper Cameron Corp., a Houston-based maker of oil- and gas-drilling equipment that agreed to cut ties with Iran. Lawmakers in at least seven U.S. states -- including Massachusetts, New Jersey, New York and Texas -- have introduced measures aimed at forcing their pension funds to sell stocks of companies tied to Sudan. "Financing and corporate investment are the life blood of any oppressive regime," says Vermont State Senator Matt Dunne, 35, co-sponsor of a resolution asking Vermont's $2.5 billion pension system to sell shares in companies doing business in Sudan. "Banks play a critical role in allowing for their survival and continued acts of terror," says Dunne, who's also associate director of the Rockefeller Center for Public Policy and Social Sciences at Dartmouth College in Hanover, New Hampshire.

HSBC's Connections

If the U.S. government forced financial institutions to disclose all links to the designated terror-sponsoring states, HSBC -- whose shares trade on the New York Stock Exchange -- would stand out as having among the most connections, says Adam Pener, chief operating officer of Washington-based Conflict Securities Advisory Group Inc., a consulting firm that tracks companies' connections to those countries and sells the profiles to money managers. "HSBC is one of the longer profiles we have: It's about three pages, and most of ours are a page, a page and a half," Pener, 32, says, reading through the data. "We see a lot of ties to Iran, from project finance to bond offerings of Iranian companies, to the fact that it's had some run-ins with the Treasury Department and it loans money to Iranian state enterprises," he says. "They're tied to Libya and Syria as well." HSBC's marketing slogan is "The World's Local Bank," illustrated in advertisements that show the company adapting to local customs wherever it is. HSBC says it also follows the laws of each of the countries where it has offices.


"HSBC is a nonpolitical organization," the bank said in a statement e-mailed by spokesman Richard Lindsay in London. "Wherever the group operates, HSBC does its utmost to comply with regulation and legislation and is fully committed to playing its part to prevent the abuse of the financial system." No foreign bank has a larger U.S. presence than HSBC, which depends on the U.S. for a quarter of its pretax profit. HSBC had pretax profit of $4.8 billion from the U.S. in 2004, while it got just $295 million -- 1.5 percent of pretax profit -- from the Middle East, excluding Saudi Arabia. The company wouldn't provide results specific to the U.S.-designated terror-sponsoring states. HSBC USA is the 10th-largest U.S. bank by assets, and the U.S. unit includes the former New York-based Republic New York Corp., which was bought in 1999 from the late billionaire Edmond Safra, and Buffalo, New York-based Marine Midland Banks Inc., of which HSBC bought 51 percent in 1980 and the rest in 1987. In New York State, HSBC is the third-largest bank by deposits, behind JPMorgan Chase & Co. and Citigroup Inc., according to the Federal Deposit Insurance Corp. In 2003, HSBC became the largest U.S. lender to homeowners with poor credit histories when it bought Household International Inc. for $15.5 billion.

Long History

HSBC's history in the Middle East goes back to 1889, when Paul Julius Reuter, creator of the eponymous news service, founded the Imperial Bank of Persia, having obtained a 60-year banking concession from the Shah, according to an HSBC company history. Imperial Bank of Persia eventually became the British Bank of the Middle East. After the 1979 revolution, the Iranian government nationalized the bank's local offices. The bank returned to Iran in September 1999, when HSBC Bank Middle East opened its representative office. Today, the office, with five banking professionals plus a tea boy and a driver, raises money for the Islamic republic's oil, gas and manufacturing industries. In February 2002, HSBC signed a $34 million credit for Iran's state-owned Bank Tejarat to finance a plant making carbon monoxide, which is used to make methanol, according to an HSBC news release.

As I go through and read the other reports on HSBC I realize that I am just another sucker in a long list of people these folks have ripped off. We refinanced our mortgage in 2002 to pay off our credit cards.

Unbeknownst to us, they purposely appraised our home $11,000 higher than it should have been (we've been told by three other appraisers) and included a buy-down on the interest rate that we did not know about (they listed it as a "fee" on our paperwork) and the mortgage aka "sales" person continually told us we would never get refinanced with anyone else even though our credit scores were good.

The HSBC experience is a daily, on-going blood pressure blowing, headache-inducing nightmare!! They have withheld our payments to collect late fees (it takes a minimum of 16 days for them to cash my check!) They have continually screwed up our escrow, it is short every year even though our taxes and insurance never changes?! Yet they can never explain why it is short, if we don't pay it then we incur late fees and/or foreclosure notices.

They calculate our adjustable interest rate wrong constantly (it has escalated to 11.25%!) and then our only recourse is to write a letter and wait for a response that never comes. You can never get through to anyone in the States your call is automatically routed to India. There they have no other information than what your payment is, and it is wrong 99% of the time. They have no manager available to talk to EVER and they ALWAY say that it has to be handled by another department. I was actually told today when trying to fix the incorrect interest rate (says it should be 11.25% when they are actually charging 11.5%) that it has gone to the research department and they "don't have phones" unbelieveable!!!

We are totally upside down on our house and have no options HSBC will just keep increasing the rate and upping the escrow and there is nothing we can do. Can't someone go after these crooks?!

I would love to be in on a class action lawsuit! I have every bit of my documentation since day one!

Indianapolis, Indiana

From their offices atop Tehran's 15- story Sayeh Tower, HSBC Holdings bankers have helped lend more than $825 million to the Iranian government, which the U.S. says sponsors terrorism and provided a haven to al-Qaeda members after the Sept. 11, 2001, attacks. Half a world away in New York, where London-based HSBC is the biggest retail bank in the state, with 412 branches, the company takes deposits just two blocks from the site of the twin towers that were destroyed in the Sept. 11 attacks. HSBC is doing business in other countries that the U.S. says sponsor terrorism, including Libya, Sudan and Syria, through direct and indirect ties, according to bank documents and interviews with executives. HSBC also banked for the Iraqi regime of Saddam Hussein, according to a CIA report published in October 2004. Such dealings by HSBC and other non-U.S.-based banks are unfettered by U.S. sanctions, which generally don't apply to foreign companies acting overseas. Even U.S. companies, which must conform to sanctions against terror-sponsoring nations, can avoid them by using foreign subsidiaries. New York-based American Express Co. uses a Bahrain-based unit to issue and accept charge cards in Syria.

Pressure to Stop

As the U.S. wages a war on terror, financial services companies are collecting deposits and fees in the U.S. while lending money in countries the U.S. says sponsor terror. An increasing number of state and city officials and pension fund managers are pressuring the companies to stop. "You are feeding that terrorism pipeline," says New York City Comptroller William Thompson Jr., who manages more than $80 billion in pension funds, including money for city firefighters and police officers, 366 of whom died in the Sept. 11 attacks. "You're enabling the government to be able to funnel dollars to terrorism," says Thompson, 51, who administers funds holding $100 million in HSBC stock. U.S. sanctions, which vary from country to country, bar most U.S. commerce with nations that sponsor terror. Financial institutions are generally prohibited from operating bank accounts for or transferring or lending money to the governments and citizens of those countries. Exceptions include the financing of some imports and exports such as humanitarian aid, sales of medical supplies and limited money transfers to ordinary citizens.

Libya and Iraq

The U.S. lifted most economic sanctions against Libya in 2004 for cooperating with weapons inspectors, yet it still considers the country a terror state. The U.S. State Department also designates Cuba, Iran, North Korea, Sudan and Syria as state sponsors of terror. Iraq was on the list until Oct. 20, when then Secretary of State Colin Powell removed it. "We put the world's financial institutions on notice," President George W. Bush said at a Nov. 7, 2001, news conference. "If you do business with terrorists, if you support them or sponsor them, you will not do business with the United States of America." Four years later, dozens of banks with offices in the U.S. have helped provide billions of dollars to Iran's government and the other nations accused of being terror sponsors. Frankfurt-based Deutsche Bank AG, which has an office in Tehran, led a group of lenders extending $1.75 billion in credit to Iran in 2003 to help pay for development of its South Pars gas fields, according to a company press release. Paris-based BNP Paribas SA and Frankfurt-based Commerzbank AG in 2002 managed the Iranian government's first foreign bond offerings since the 1979 Islamic revolution, raising 875 million euros ($1.1 billion), according to Commerzbank's Web site.

Rice Quizzed

Members of Congress quizzed Secretary of State Condoleezza Rice at a Feb. 17 hearing of the House International Relations Committee about such dealings. "Our unwillingness to use our economic power as a stick, because of our unwillingness to inconvenience international corporations," is worrying, Representative Bradley Sherman, a Democrat from California, said of the U.S. HSBC, Europe's biggest bank by market value, says it isn't breaking the law and is merely trying to make money. "The job of HSBC Bank Middle East is to take advantage of business opportunities in the region," says Steve Martin, a spokesman in Dubai for HSBC's Middle Eastern unit.

Current Law Students / Re: Adderall-Law school finals/studying
« on: December 09, 2006, 09:33:33 PM »
Has anyone been on ecstasy when studying/taking exams? I know E is the last drug to use in such occasions, but some people say it's just as effective as speed, for example ..

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