Report: HSBC "allowed money laundering"
- 12 years ago
HSBC has become the latest British bank to have its reputation called into question.
A U.S. Senate committee into money laundering said the bank handled suspicious transactions, possibly for drug kingpins in Mexico, and rogue nations like Syria and Iran.
David Bagley is head of group compliance at HSBC.
SOUNDBITE: DAVID BAGLEY, HEAD OF GROUP COMPLIANCE, HSBC HOLDINGS, SAYING (English):
"Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators."
The Senate report said between 2007 and 2008, HSBC's Mexican arm moved 7 billion dollars into its U.S. operations.
Mexican and U.S. authorities warned HSBC that the amount of money could only have reached such a level if it was tied to
illegal narcotics proceeds.
David Cohen is the U.S. Treasury's Under Secretary for Terrorism and Financial Intelligence.
SOUNDBITE: DAVID COHEN: U.S UNDER SECRETARY FOR TERRORISM AND FINANCIAL INTELLIGENCE, SAYING (English):
"If this is dirty money you're trying to portary as clean funds being able to run it through the U.S. financial system helps you achieve that objective.
The hearing heard of the difficulty HSBC faced working in Mexico, where a drug war has claimed 40,000 lives since 2006 and kidnappings are common place.
Paul Thurston was HSBC's Mexico chief executive during 2007 when information about drug cartel money laundering became known.
SOUNDBITE: PAUL THURSTON, HSBC HEAD OF RETAIL BANKING AND WEALTH MANAGEMENT AND FORMER CHIEF EXECUTIVE OF HSBC MEXICO, SAYING (English):
"Unlike the United States, Mexico was a data poor environment, making it difficult to verify the identiy of customers. Some of things I saw took my breathe away. But every time I saw a weakness I tried to ensure we took action."
HSBC apologised, while its Head of Compliance told the hearing he was resigning from the post he's held for a decade.
SOUNDBITE: DAVID BAGLEY, HEAD OF GROUP COMPLIANCE, HSBC HOLDINGS, SAYING (English):
"I recommended to the group that now is the appropriate time for me and for the bank for someone new to serve as the head of group compliance. I have agreed to work with the bank's senior management toward an orderly transition of this important role. "
HSBC shares fell only slightly after the report was released.
But the bank is likely to face massive fines from U.S. regulators and perhaps worse, if it finds itself in the political crosshairs in an election year.
Andrew Potter, Reuters
A U.S. Senate committee into money laundering said the bank handled suspicious transactions, possibly for drug kingpins in Mexico, and rogue nations like Syria and Iran.
David Bagley is head of group compliance at HSBC.
SOUNDBITE: DAVID BAGLEY, HEAD OF GROUP COMPLIANCE, HSBC HOLDINGS, SAYING (English):
"Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators."
The Senate report said between 2007 and 2008, HSBC's Mexican arm moved 7 billion dollars into its U.S. operations.
Mexican and U.S. authorities warned HSBC that the amount of money could only have reached such a level if it was tied to
illegal narcotics proceeds.
David Cohen is the U.S. Treasury's Under Secretary for Terrorism and Financial Intelligence.
SOUNDBITE: DAVID COHEN: U.S UNDER SECRETARY FOR TERRORISM AND FINANCIAL INTELLIGENCE, SAYING (English):
"If this is dirty money you're trying to portary as clean funds being able to run it through the U.S. financial system helps you achieve that objective.
The hearing heard of the difficulty HSBC faced working in Mexico, where a drug war has claimed 40,000 lives since 2006 and kidnappings are common place.
Paul Thurston was HSBC's Mexico chief executive during 2007 when information about drug cartel money laundering became known.
SOUNDBITE: PAUL THURSTON, HSBC HEAD OF RETAIL BANKING AND WEALTH MANAGEMENT AND FORMER CHIEF EXECUTIVE OF HSBC MEXICO, SAYING (English):
"Unlike the United States, Mexico was a data poor environment, making it difficult to verify the identiy of customers. Some of things I saw took my breathe away. But every time I saw a weakness I tried to ensure we took action."
HSBC apologised, while its Head of Compliance told the hearing he was resigning from the post he's held for a decade.
SOUNDBITE: DAVID BAGLEY, HEAD OF GROUP COMPLIANCE, HSBC HOLDINGS, SAYING (English):
"I recommended to the group that now is the appropriate time for me and for the bank for someone new to serve as the head of group compliance. I have agreed to work with the bank's senior management toward an orderly transition of this important role. "
HSBC shares fell only slightly after the report was released.
But the bank is likely to face massive fines from U.S. regulators and perhaps worse, if it finds itself in the political crosshairs in an election year.
Andrew Potter, Reuters