US Outlook: Transatlantic regulatory battles are not about Us versus Them

American regulators are not picking out HSBC for special disfavour

HSBC is in the spotlight for a 2013 case during which prosecutors said that it acted as the “preferred financial institution” for money laundering on behalf of presumably lucrative but highly dubious customers, including Mexican drug cartels (PA)

A common perception of regulatory battles is that Americans go after European banks, while Europeans go after American tech companies. HSBC found itself in the firing line yet again last week in the US, while Google and Apple continuing to feel the long arm of the law in Europe.

So is that a reasonable interpretation? Not really.

American regulators are not picking out HSBC for special disfavour. Just ask JP Morgan or Bank of America, which hardly manage to get through a month, never mind a quarter, without paying a fine or reaching a settlement with prosecutors.

HSBC has also earned every moment in the regulatory spotlight. The latest unwanted attention stems from a 2013 case during which prosecutors said that it acted as the “preferred financial institution” for money laundering on behalf of presumably lucrative but highly dubious customers, including Mexican drug cartels. The bank was fined $1.9bn (£1.2bn) – chickenfeed – but needless to say, no actual employee faced any charges. Some of the prosecution was even deferred so long as HSBC played ball.

So HSBC played ball, and officially did everything that was asked of it. What HSBC and US regulators weren’t banking on was the discovery of more shenanigans, in the form of money-laundering and tax evasion at the bank’s Swiss unit. The odds on there being more skeletons in HSBC’s closet are short.

That said, last week’s comments from the US Department of Justice were slightly puzzling. The Attorney General nominee Loretta Lynch wrote that HSBC is not yet up to satisfactory speed with its efforts against money-laundering, despite acting in “good faith”. The implication is that it is still laundering money, whether knowingly or not.

HSBC’s problems are far from over. Like most of its peers it is paying the price for years of an institutionalised devil-may-care attitude to regulations and laws. Worry about making money first, worry about legality second. Until bankers, and not just banks, face the same kinds of criminal penalties as the rest of society does, that’s unlikely to change.

Meanwhile, European lawmakers continue to go after Google and Apple. After many years of anti-trust investigation, Google could end up facing a fine of up to $6bn, 10 per cent of its annual revenue in the European Union. Apple hasn’t even launched its new music service and already it is facing an investigation over whether it will force record labels to opt out of free streaming services like Pandora or Spotify.

Apple and Google are nothing if not ruthless, just like HSBC. That businesses push rules as far as they can, and sometimes well past accepted boundaries, would hardly be a shock.

That said, it is easy to understand why many in the American media feel that jealousy is behind European politicians’ pursuit of Google and Apple. European tech companies don’t get the same treatment in America, possibly because so few that have cracked the American market.

All of the companies in question give their detractors plenty of justification to continue their pursuit, because they are so rarely found to be innocent.

Regulators on both sides of the Atlantic also get an unfair rap. They are there for a purpose: to enforce laws, not to prevent businesses from legally making a buck. That many companies can’t seem to resist flirting with criminal activity isn’t the regulators’ fault. Neither is it proof that there is some sort of “Europe vs US” proxy war going on – but increasingly that’s the perception, and that’s very dangerous territory.

Hard Rock Hotel, Florida

Big chunk of Florida up for grabs

Are you a real-estate mogul with a spare billion burning a hole in your pocket? If the answer is “yes”, and you’ve always wanted to buy a significant chunk of Florida’s Gulf Coast, then the deal you have been waiting for is now on the market.

Let’s be honest, who doesn’t want to own most of the Gulf Coast? The board of Foley Timber and Land Company have put the company up for sale, along with 876 square miles of land (560,000 acres) that was once Procter & Gamble’s main source of the trees it pulped to make nappies. No matter how big your back garden, that’s a significant chunk of real estate.

Unlike almost all of the rest of Florida, this forest in the north near the state capital, Tallahassee, is almost entirely undeveloped. Nothing but trees and wild beasts. Amazingly for a piece of land in Florida, it has also never been hit by a hurricane.

Land developers will be salivating at the potential of this piece of property, although if you’re one of Florida’s many endangered species the sale has less exciting potential. It has no direct coastline, but has no shortage of planning permission, enough to tempt most big real-estate developers into at least taking a look. The state government of Florida has already approved development plans for 128,000 acres, including 43,000 acres of residential and commercial development.

Florida’s population overtook that of New York State in December, making it the third most populous state after California and Texas, so demand for living, leisure and shopping space is only going in one direction.

Despite its vast size, it is a long way short of being the largest private real-estate deal in American history. In 2011 a piece of land in Nevada measuring about 1.3 million acres was sold, although at a price tag of $31m its price per acre was a pittance in comparison to what Foley’s current owners, which include a former ambassador to France, are hoping to make.

Speaking of real-estate moguls with the odd billion burning a hole in their pocket, Donald Trump has homes and companies galore in Florida. The Don and his bouffant are “exploring” yet another bid for the Republican presidential nomination, perhaps to be funded by the $100m suit he launched against a Florida county in January for daring to fly its planes over his Palm Beach mansion.

With luck, the Foley land will have found a buyer long before he drops out of the presidential race and returns to his day job.