Today's biggest story in the financial world involves a record $1.9 billion in fines against British banking behemoth HSBC. The bank agreed to pay the fines to U.S. authorities for its failure to monitor illegal activities, including the laundering of drug money from Mexico.
The story has a distinct international flavor. But thanks to Birmingham-based Bradley Arant, our state's largest law firm, the story also has a taste of Dixie. That's because Bradley Arant has made it a habit to represent HSBC and other rogue financial outfits.
Bradley Arant became a major focus of our reporting because it represents Charlotte-based Campus Crest Communities and its CEO, Ted Rollins. Public records show that Rollins has engaged in all sorts of unsavory activity--perjury, child abuse, failure to pay child support, gross manipulation of a divorce case--and much of it has been centered in Alabama.
But as we reported in July, Bradley Arant is willing to bed down with a whole host of bad actors, including those who run HSBC. What kind of outfit is HSBC? Consider this from today's Reuter's report on the massive fines:
Mexico's Sinaloa cartel and Colombia's Norte del Valle cartel between them laundered $881 million through HSBC and a Mexican unit, the U.S. Justice Department said on Tuesday. . . .
Bank officials repeatedly ignored internal warnings that HSBC's monitoring systems were inadequate, the Justice Department said. In 2008, for example, the CEO of HSBC Mexico was told that Mexican law enforcement had a recording of a Mexican drug lord saying that HSBC Mexico was the place to launder money.
Mexican traffickers used boxes specifically designed to the dimensions of an HSBC Mexico teller's window to deposit cash on a daily basis.
You might think that Bradley Arant would want to keep a considerable distance between itself and HSBC. But you would be wrong. Bradley Arant lawyers seem to welcome HSBC, and its affiliates, as clients. From our July report:
George R. Parker, one of the firm's Montgomery attorneys, represented various HSBC entities in a 2008 federal lawsuit styled George D. McCarley v. KPMG International, et al. The case involved allegations of fraud connected to a home foreclosure, and considering that it started in the Middle District of Alabama and was appealed to the U.S. Eleventh Circuit in Atlanta, it should be no surprise that the corporate defendants prevailed.
Andrew J. Noble III and John David Owen, of Bradley Arant's Birmingham office, represented an HSBC entity in a 2011 state lawsuit styled Moore v. HSBC Mortgage Services. The complaint involved allegations of breach of contract and other wrongdoing related to construction of a new house. Once again, the corporate defendant prevailed--with Bradley Arant's assistance.
Bradley Arant's ties to banking skulduggery do not end with HSBC. Reuter's includes Wachovia among other rogue banks that are under scrutiny. And here is what we reported earlier this year about the ties between Wachovia and Bradley Arant:
Officials for Wachovia Bank admitted in 2010 that they helped move $378.4 billion for Mexican drug cartels. Wachovia, which was purchased by Wells Fargo in 2008, paid $160 million in fines and penalties, and according to Bloomberg, that amount is less than 2 percent of the bank's $12.3 billion profit for 2009.
Wachovia had roots in Charlotte, and Wells Fargo is based in San Francisco, so where is the Birmingham connection? Well, that goes back to SouthTrust Corporation, which once was known as one of our city's "Big Four" banking institutions.
SouthTrust had $53 billion in assets and branches in nine states (Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Virginia) when it merged with Wachovia in 2004. Wachovia was experiencing deep losses in the midst of the 2008 financial crisis when Wells Fargo plucked the bank off the scrap heap at a bargain-basement price of $12.8 billion. . . .
Throughout the SouthTrust/Wachovia/Wells Fargo mating dance--when Birmingham was hemorrhaging banking jobs--Bradley Arant had its dirty hands in the pie. And it looks like there was plenty of dirt to go around.
We are all for rogue bankers being held accountable. But when are authorities going to take a look at the law firms that are up to their necks in these dirty deals?