"The Fines Are Not Working": HSBC Whistleblower Urges Treasury to Prosecute Bankers After Bank of America's $1.2 Billion Penalty
In an open letter to US Treasury Secretary Scott Bessent, HSBC whistleblower Everett Stern says a $1.2 billion fine on Bank of America over unreported suspicious transactions linked to Chinese laundering networks, narcotics and sanctions violations will not stop money laundering. He calls for criminal referrals of executives, an end to "too big to jail" and a review of the bank's charter.
Everett Stern, the former HSBC compliance officer whose disclosures preceded the bank's $1.92 billion settlement in 2012, has written an open letter to US Treasury Secretary Scott Bessent.
In it he argues that corporate fines have failed to stop banks from moving money for cartels, sanctioned regimes and terrorist groups.
The Trigger
Stern was responding to what he described as a $1.2 billion Treasury penalty on Bank of America.
He said the bank was fined for failing to report more than $5 billion in suspicious transactions, some of them tied by Treasury's findings to Chinese laundering networks, narcotics and the southwest border, along with 475 apparent sanctions violations involving Russia, Iran and global terrorism.
According to Stern, the bank admitted to wilfully violating the Bank Secrecy Act.
"Fourteen years after HSBC... and once again, not one individual charged," he wrote.
"Fines Are Paid by Shareholders"
Stern argued that penalties are absorbed by the balance sheet and forgotten by the next earnings call, while the executives who set alert thresholds and allowed backlogs to grow face no consequences.
He noted that the HSBC settlement amounted to roughly five weeks of the bank's profit.
He called the issue one of national security rather than politics.
"Money that reaches a cartel buys fentanyl that kills Americans. Money that reaches a terrorist organization buys the next attack," he wrote.
Three Demands
- Criminal referrals: prosecute the executives who chose the risk, not the analysts in the queue. "One banker in handcuffs would do more than every fine in Treasury's history combined."
- End "too big to jail": an institution that is too big to fail must be held to a higher standard, not a lower one.
- Review the charter: a national bank charter should depend on not moving money for those who threaten the country.
The Whistleblower Gap
Stern said he lost his career and savings after reporting HSBC and was blacklisted from finance.
He said this is why no one inside Bank of America has come forward.
"The last person who spoke up is the only policy anyone believes," he wrote, calling it a culture problem that starts with leadership in both banks and regulators.
Why It Matters
The letter revives a long-running debate in anti-money-laundering enforcement: whether institutional fines deter anything without personal accountability.
The concern applies globally, including to India, where mule accounts and cross-border laundering through banks and crypto channels fund cyber fraud.