HSBC grilled in US Senate for lax controls enabling billions of money laundering
The CEO of the U.S. division of the big international bank HSBC is apologizing for lax controls that lawmakers say allowed Mexican drug cartels to launder billions of dollars through the US operation and many other illicit transactions for years.
Irene Dorner, president and CEO of HSBC Bank USA, said in testimony prepared for a hearing by the Senate Permanent Subcommittee on Investigations that “we deeply regret and apologize” for the lapses by HSBC.
An investigation by the subcommittee found persistent problems at HSBC which executives ignored.
Dorner and other HSBC executives say the bank has made deep changes to its policies and corporate culture to prevent illicit use of the bank. London-based HSBC, which is Europe's largest bank, changed its senior management last year.
“These changes will be embedded and sustained going forward,” Dorner says.
The panel's chairman, Senator Carl Levin, a Democrat from Michigan, says HSBC's new policies “are all good steps.” However, Levin said while apologies are welcome, “accountability for past conduct is essential. And that is what is missing here.”
Senator Levin said HSBC needs to identify which of its affiliates pose a high risk of problems and put them under close monitoring. The bank should consider closing the account of its Mexican affiliate, he said.
HSBC also should close its accounts with banks suspected of providing funding to terrorist groups, Levin said.
The subcommittee's extensive report on HSBC also says US regulators knew the bank had a poor system to detect problems but failed to take action. HSBC executives brushed off complaints from other bank employees, so that the problems persisted for eight years, the report says.
In addition, some HSBC bank affiliates skirted US government bans against financial transactions with Iran and other countries, according to the report. And HSBC US division provided money and banking services to some banks in Saudi Arabia and Bangladesh believed to have helped fund al-Qaeda and other terrorist groups, the report said.
The US Justice Department said it is conducting a criminal investigation into HSBC operations but declined to confirm that the bank is in settlement talks.
HSBC net income last year was 16.8 billion dollars. It operates in about 80 countries around the world. Its US division is among the top 10 banks operating in the United States. It has assets of roughly 210 billion US in its US operations.
Senator Levin also blasted the federal agency supervising the bank's US operations, the Office of the Comptroller of the Currency. He said the agency “tolerated” HSBC weak controls against money laundering for years.
Thomas Curry, who heads the Office of the Comptroller of the Currency, also was to testify at the Committee’s hearing.
The Wall Street Journal reported Monday that the HSBC and the Justice Department have been in settlement talks and an accord could be struck within weeks. Justice Department spokeswoman Alisa Finelli acknowledged that an investigation is under way but declined to comment on possible settlement discussions.
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Just helping the Mexican drug lords, Al Qaeda an Iran to launder billions.
Do compare that with some Arg politicians and big business please?
I did wonder why HSBC and Barclays avoided a “bailout” though- appears they were doing a bit more that riske deals like the others and actually fiddling instead! I think they both will pass the entry exams to move to Argentina.
oh! Dio another flag waiver wanted to show a perfect Britain.
The only perfect thing in Britain is the bad weather, yes never fails.
The rest just a bunch of hypocrites living in denial all the time.
If what you say would be near to 10% close to reality the 80 % of your elite and politicians would be all in jail for life.
Only the idiots and poor go to jail in Britain.
Tell me how many sir lords have you seen in jail involved in bank scams and fraud?
None they give to themselves a huge bonus and then move to the next scam.
None is able to control anything in Britain is bad for business especially the money laundering stuff.
And for all we know it may be the bad boys in HSBC are not even British anyway - it is after all a multinational bank!- even has a branch or two in Argentina!
I could not care what nationality someone is - if they can be proven to have been involved in illegal activities - then inside they go!
“But in Britain you have to be proven in Court first”
HSBC documents show that they knew from the beginning what they were doing, let me know when the executives go to jail Zzzzzzzzzzzzzz.
Oh! Poor Islander he has been so indoctrinated that he cannot support to see the truth about his little corrupted country. Full of crooks making money on expenses of poor taxpayers.
Well denial after all is a way of psychological self-defence to avoid facing reality.
I guess none can blame you...
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