HSBC launders drug money “by accident”:
July 20th, 2012
by Pratap Chatterjee, CorpWatch Blog
HSBC, one of the world’s largest banks, has been accused of laundering money for Mexican drug cartels. At a hearing conducted by the U.S. Senate earlier this week, David Bagley, HSBC’s head of compliance, apologized and resigned.
“I recognize that there have been some significant areas of failure. Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators,” Bagley told the U.S. Senate Permanent Subcommittee on Investigations.
HSBC traces its origins back to the Hong Kong Shanghai Banking Corporation that was set up in 1865. Today it is one of the largest financial institutions in the world, with over $2.5 trillion in assets, 89 million customers, 300,000 employees, and 2011 profits of nearly $22 billion. The CEO is still based in Hong Kong but the bank is run out of London.
In 2002, HSBC bought up a Mexican bank named Banco Internacional, S.A. from Grupo Financiero Bital, S.A. de C.V. “A pre-purchase review disclosed that the bank had no functioning compliance program, despite operating in a country confronting both drug trafficking and money laundering,” noted a report prepared for the U.S. Senate. “It opened accounts for high risk clients, including Mexican casas de cambios and U.S. money service businesses, such as Casa de Cambio Puebla and Sigue Corporation which later legal proceedings showed had laundered funds from illegal drug sales in the United States.”
Comical Mickey’s okay with that though:
irishtimes.com/newspaper/fin … 50685.html
The Irish Times - Friday, July 20, 2012
SIMON CARSWELL and NIAMH SWEENEY
THE NAMING of David Hodgkinson, the AIB chairman, and Mike Geoghegan, one of the Government advisers on the National Asset Management Agency, in a highly critical US Senate report on HSBC bank’s involvement in money laundering, does not affect their current roles, according to the Minister for Finance.
Both men are former employees of HSBC and were aware of the practices.
Mr Hodgkinson was a senior executive and Mr Geoghan is the former chief executive.
Mr Noonan said the Central Bank tests the fitness and probity of bankers and they had “brought nothing to my attention which would change the view on AIB”.
The Minister said he was “quite comfortable” with Mr Geoghegan’s advice on Nama, which he provides on a “pro-bono basis”.
“I am quite comfortable that he should continue in that role and there is nothing in that report in the United States that would make me change that position,” said Mr Noonan, who was speaking at the launch of the National Treasury Management Agency’s report for 2011.
That’s okay then Mickey - seeing as all we’re talking about is:
business-ethics.com/2012/07/20/1 … e-numbers/
July 20, 2012
by Cora Currier, ProPublica
This week a Senate investigation detailed that HSBC had lax controls against money-laundering and often ignored warnings about clients with ties to drug cartels and terrorists.
The bank is also reportedly nearing a settlement with the Justice Department, which has two criminal investigations into whether HSBC was complicit in money-laundering and tax evasion.The federal regulator that should have been keeping tabs on all this, the Office of the Comptroller of the Currency, also came under fire for “systemic weaknesses” in its oversight of banks’ anti-money laundering procedures.
The report reaches back more than a decade, and in testimony in front of the Senate this week, the bank apologized and vowed it has recently overhauled its anti-money-laundering efforts. The bank’s head of compliance stepped down this week. But the Senate report notes that HBSC made similar promises of reform back in 2003 when it was cited by regulators for poor oversight of suspicious transactions. HSBC declined to comment further on the report or on the DOJ’s ongoing investigation.
There are lot of blunders and blind spots detailed in the Senate’s 335-page takedown. Here’s a rundown - in each instance, we’ve linked to the relevant page in the report.