HSBC’s list of clients
Mexican drug lords, terrorists, State Sponsors of Terror, Castro crime syndicate, etc...
What comes out in the wash
BANKERS to Mexican drug lords, Iran, the Taliban, a Syrian terrorist, Cuba, Sudan, North Korea and Hamas—that was the charge sheet faced by HSBC executives as they became the latest group of financiers to be hauled down to Washington, DC, for public shaming. A scathing 335-page report from a year-long probe was released on July 17th by the Senate’s Permanent Subcommittee on Investigations.
“HSBC’s compliance culture has been pervasively polluted for a long time,” said Senator Carl Levin, who chairs the committee. He claimed that HSBC used its bank in the United States as a gateway into the financial system for illicit money, and he threatened to push for a revocation of the bank’s charter.
Contrition was the primary response. “HSBC’s compliance history,” said Irene Dorner, the head of HSBC’s American bank, “as examined today, is unacceptable.” David Bagley, who headed compliance at HSBC, used his testimony to announce he was stepping down.HSBC’s new chief legal officer is Stuart Levey, previously the Treasury’s undersecretary for terrorism and financial intelligence. Mr Levey said his arrival was one piece of a comprehensive reorganisation under the bank’s new chief executive, Stuart Gulliver. The overhaul will allow information on suspect clients and transactions, that the bank’s individual country operations had not previously shared, to be pooled.
The bank has boosted its budget for anti-money-laundering compliance in America, to $244m in 2011, a ninefold increase from 2009. Not before time. The report describes a constant struggle for resources by a compliance department vainly attempting to monitor a vast and expanding number of transactions and regulations in the face of efforts by executives to tamp down costs.
One employee who pushed hard for more resources to address festering problems was apparently sacked because of her efforts. Another, cited in 2009 by the bank’s primary regulator, the Office of the Comptroller of the Currency (OCC), as being unqualified, was promoted.
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