Stakeholders HSBC

Money laundering is the process of covering up the proceeds of a crime so it cannot be linked to
the wrongdoing. It was found that HSBC has been transferring $7 billion in banknotes from its
Mexican to its U.S subsidiaries. Much of this $7 billion was drug related. Their failures also went
as far as dealing with bank Al Rajhi in Saudi Arabia that was linked to the financing of terrorist
groups. The bank failed to monitor $58 trillion of money moving across boarders and through
their branches. HSBC now faces 1.9 billion dollars in fines and penalties that they have agreed to
pay to avoid more serious consequences.
Stakeholder
Herve Falciani

Task
POI
Is
the
Whistleblower
that

informed the authorities regarding

the illegal activities such as Tax
Evasion and Money Laundering
undertaken by HSBC by releasing
the Lagarde List to the IMF and

other Governmental Agencies

HSBC
Employees

While some of the employees of

HSBC might have assisted the
clients to evade tax and launder
money on the orders of the
Management. Most of the
employees were unaware of the
actions of the company

HSBC
Investors

Should have informed the

Government Authorities for the
purpose
of exposing the
wrongdoing of HSBC instead of
for personal gains
Should assist the relevant
authorities to ensure all the
individuals responsible and
culprits are punished
Employees knowing about this
illegal activities could have
informed
the
necessary
authorities
Could have complained against
the management and or make
efforts to limit this illegal
activity
Could have left their Job at
HSBC since they knew HSBC
was undertaking illegal activity
Should have asked the HSBCs
clients not to undertake in illegal
activity

Many loyal employees of HSBC lost

their jobs or bonuses when HSBC illegal
activities were caught due to loss cutting
activities of HSBC.
All investors that have developed
Should have better analyzed the
trust for HSBC over the years due
activities of the HSBC before

to repeated investment within the

company lost a lot of money
invested as well as trust due to
illegal activities of HSBC

HSBC
Customers

HSBC
Management

All customers trust the bank to

protect their money and use it
legally to help its customers. But
due to this scandal, customers
wont trust the bank as it entered
into illegal activities while
protecting and helping terrorists,
international criminals, corrupt
businessmen and other high-risk
individuals
HSBC Management had the
primary aim to earn profit and
improve their profitability and
customer base of the company.
Therefore, they decided to provide
additional illegal facilities such as
tax evasion and money laundering
for
terrorists,
international
criminals, corrupt businessmen
and other high-risk individuals of
approximately US $100b. Also,
when exposed by the media, while
paying fines of US $1.5b, no
member of the management
confessed to his/her mistakes,
which was difficult to pinpoint
due to huge operation base of the
company

Government
Agency

The Government of any country is

basically tasked with ensuring all
citizens of the country pay their

investing
Being an investor, they could
have easily managed the
operations of HSBC to prevent
provision of illegal activities
Will prefer to open account with
competing
banks
having
transparent operations
Wont trust HSBC to protect their
money as they feel HSBC might
use their money for illegal
purposes and broke legal and
ethical laws

Should have ensured that HSBC

provides only legal services to
its customer base
Could have informed appropriate
authorities regarding customers
requesting illegal services
Shouldnt have customers with
shady backgrounds such as
international criminals, corrupt
businessmen arms dealers who
channeled mortar bombs to child
soldiers in Africa, bag men for
Third World dictators, traffickers
in blood diamonds and other
international outlaws.
Should pay fines of US $ 1.5b
while apologizing to customers
for losing their trust and being
involved in illegal activities
Should confess who all were
involved in this activity to
ensure culprit gets punished
The Government should have
been proactive to ensure all the

taxes and arent involved in any

illegal activities. While allowing
its citizens with economic
freedom
to
develop
their
companies or business, invest and
also work as long as all tasks the
citizens enter in are illegal

HSBC Board Although the main aim of HSBC

of Directors
Board of Directors is to develop
organizational policies while
overlooking operations that will
help in growth and development
of the company, they also should
ensure all the operations of HSBC
are within legal framework.
Surely few active members of the
Board of Directors knew about
HSBC providing illegal activities
but decided to continue providing
these services as it was profitable

activities of HSBC are within

legal framework

The Government could have

closely monitored the clients of
HSBC to ensure HSBC doesnt
provide services to shady
individuals

The Government should have

worked with HSBC to ensure all
shady individuals were brought
to justice

Should Fine HSBC more than

US $ 1.5b as the HSBC has
helped clients evade tax and
launder money more than US $
100b
Could have evaluated the day to
day operations of the company
to ensure HSBC doesnt provide
illegal services
Should have ensured that the
profits of the company are
attained only through legal terms
Should have informed the
authorities
of
the
illegal
activities of the company and
made efforts to stop or prevent
them
Could have made policies that
prevent company official to
provide illegal services
Should
have
informed
appropriate authorities regarding

Analysts

Non
Government
Organizations

Various Students and Financial

Analysts, analyzing HSBC actions
due to its Money Laundering and
Tax Evasion issues for knowledge
gain as well as assist HSBC make
efficient decisions to ensure long
term development of HSBC. They
have analyzed all the stakeholders
actions and feel that this exposure
will result in decrease in HSBC
profitability, revenue and sales in
the long terms as customers and
investors wouldnt want to invest
in company engaging in illegal
tasks
As many of the individuals
involved within the Tax Evasion
and Money Laundering were
shady individuals involved in
corrupt businessmen arms dealers
who channeled mortar bombs to
child soldiers in Africa, bag men
for Third World dictators,
traffickers in blood diamonds and
other international outlaws. HSBC
assisted them in continuing their
illegal activities that indirectly
resulted in death and sickness of
many individuals (addicts, raped,
prostitutions and so on)

Ethical Arguments

which Member of Board of

Directors were supporting illegal
activities within the company
Should apologize to the investors
and customers for undertaking
illegal
activities
and not
undertake such activity again.

Analyze HSBC actions and feel

HSBCs fine payment would
decrease profitability in the long
term

Will have to help and save lives

of many people naively affected
by the actions of these shady
individuals such as corrupt
businessmen arms dealers who
channeled mortar bombs to child
soldiers in Africa, bag men for
Third World dictators, traffickers
in blood diamonds and other
international outlaws
Should work with Governmental
Agencies to improve lives of
many
sick
and
addicted
individuals

Alternative 1
Contribute to society and human well-being.
As HSBC is assisting international criminals, corrupt businessmen arms dealers who channeled
mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood
diamonds and other international outlaws to Evade Taxes and Launder Money that is used for
nefarious purposes of terrorist attacks and other means of hurting people and their family.
Therefore HSBC, being an international bank, trusted worldwide shouldnt serve or provide
illegal services customers having shady back
Hence it can also be said Herve Falciani was right to expose the illegal activities of HSBC,
forcing HSBC to operate within the legal framework
Avoid harm to others.
As HSBCs shady clientele, while improving the profitability of the company, was using the
illegal services provided by HSBC for various nefarious purposes all around the globe, resulting
in death and disability of many individuals worldwide. Nonetheless, HSBC knowing that from
where the funds of these individuals were coming from and being used for didnt terminate their
services to these shady individuals
Therefore, Herve Falciani, helped the Governments worldwide by helping them stop these shady
individuals to manage their funds by HSBC
1.3 Be honest and trustworthy.
HSBC, being a global bank, provides banking services to a huge diverse range of individuals
worldwide shouldnt be handling such shady clients just for the primary purpose of increasing
their profitability as they are trusted by its clients worldwide for providing premium quality of
service and no customer would want to acquire services from a bank that is involved in unethical
tasks
Hence, HSBC reqires to increase transperancy in its services to ensure customers will regain
their trust in the bank

Alternative 2

Avoid harm to others.

Mr. Herve Falciani could have decided to stay quiet when finding out about the shady clientele
of HSBC that are being provided with illegal services such as Tax Evasion and Money
Laundering, which is used by them to engage in Terrorist Activities that harm or kill innocent
individuals worldwide. Hence keeping his job, enabling Shady Clientele of HSBC to contniue
acquiring required illegal banking services, allowing HSBC to increase its profitability while
preventing loss of jobs for many employees of HSBC due to cost cutting to reduce the loss faced
by the company

Respect the privacy of others.

Mr. Herve Falciani could have protected the privacy of the bank, its clientele as well as the
services its provides to its special customers (both legal as well as illegal). He could have
followed the Swiss Banking Secrecy Laws and not indulged in Business Espinonage by
preferring not to leak the Lagarde List of Shady Customers of HSBC involved in Money
Laundering and Tax Evasion.
However, it wouldnt have been an ethical thing to do, not to mention he did leak the list for
personal gain and is against the ACM Code of Ethics of Contribute to society and human wellbeing.
Honor confidentiality.
Additionally, Mr. Herve Falciani could have protected the confidentiality of HSBC clients,
although knowing that they are involved in illegal activities and are acquiring illegal services

from HSBC. While following this could have protected the job of Mr. Herve Falciani and his co
workers who lost their jobs due to cost cutting measures of HSBC to reduce their loss due to
reduction in customer base, payment of fine to the governemnt and reduction in investors
willing to invest their money in HSBC
On the other hand, not doing anything just to save his job would be unethical as the finances of
shady people managed by HSBC are used for various nefarious purposes