Hsbc money laundering_ bank vows fixes. senators doubtful. – csmonitor. com

Banks are facing accusations of greed tied to allegations that international banks for years tried to rig the global lending benchmark rate Libor and other scandals, including a trading bet gone awry at JPMorgan Chase & Co.

Senator Carl Levin, who chairs the panel, read what he said was a 1993 statement from HSBC that asked its group members to comply with the letter and spirit of laws, and said it sounded similar to the commitments offered by HSBC on Tuesday.

“Do you agree, given past commitments have not been kept, that the bank has a heavy burden of proof that they mean what they say?” Levin asked one panel of witnesses consisting of HSBC’s top legal officer and the head of HSBC’s U.S. What is the purpose of money laundering operations.

Levin later added that others would judge HSBC’s accountability. Integration money laundering “We are not in the prosecution business here, we are in the oversight business.”

The bank is still facing a Justice Department investigation, with a potential fine that dwarfs the record $619 million that ING agreed in June to pay to settle similar claims.

Reuters own investigation into HSBC found persistent lapses in the bank’s anti-money laundering compliance since 2010, after years of being scolded for lax practices.

Levin, who suggested the bank’s charter could be at risk if it did not do better, pressed HSBC officials on whether they looked the other way on suspicious activity if it meant profits.

“Your test apparently for opening an account is first, how much revenue it would produce. Money laundering and terrorist financing But what about the second test Mr. Money laundering documentary Lok?” Levin asked former executive Christopher Lok. Bank money laundering “What about a test of, is the bank involved in wrongdoing?”

David Bagley, the outgoing compliance executive, told the hearing that while reforms had been made, it was time for him to go. Punishment for money laundering “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,” he said.

The Senate report said HSBC had little oversight of client accounts housed in a shell operation in the Cayman Islands, well known for offering secret accounts and a limited tax regime. Money laundering miami By 2008, the Cayman accounts held $2.1 billion.

Bagley was on a panel with other executives, but some of the toughest questions were reserved for Stuart Levey, who joined the bank in January as chief legal officer. Simple meaning of money laundering He had been the Treasury Department’s top official on terrorism finance from 2004 to 2011.

In an August 2007 email, Bagley told his superiors that he had seen Levey at a conference and Levey had “expressed concern” that the bank had accounts for an entity that ultimately served as a conduit for Iranian government funding.

“Levey essentially threatened that if HSBC did not withdraw from relationships with (redacted name) we may well make ourselves a target for action in the U.S.,” Bagley told his bosses.

In subsequent emails, Bagley and another HSBC official discussed that while little of the banking relationship remained, “it would have been inaccurate to tell Levey there was nothing,” Bagley wrote in an email.

Levin battered Levey with questions about whether the bank would follow U.S. Recent money laundering cases in india law or Cayman law in cases of conflict and whether HSBC would improve its own internal sharing of information to help cut down on illicit activity.

To some extent Levey and HSBC Bank USA CEO Irene Dorner were able to deflect the harshest criticism by pointing out that they were relatively new to their jobs, and had taken them up after the worst of the bad acts had happened.

“We’ve committed within the company … Anti money laundering act meaning to maximize the sharing of info for risk management purposes,” Levey said. Money laundering regulations 2016 “We’ve decided that’s the value that we’re going to pursue, we need to share information.”

The changes Bagley and Levey talked about are coming at a significant cost to the bank, as spending on anti-money laundering systems and staff have increased substantially. Money laundering cases in india Dorner said the bank now has 892 full-time anti-money laundering compliance professionals.

HSBC shares closed 1.7 percent lower in London trade. Money laundering stages Analysts warned that the bank faced huge financial penalties but said political risk may be a greater threat.

“(The) most important consequence is that the bank is now under the microscope … Money laundering act 2007 at a very bad time where banks are used as scapegoats by politicians globally,” analysts at Italian bank Mediobanca said in a research note, adding that they expect HSBC to face a $1 billion fine as well.

It detailed how between 2007 and 2008, HSBC’s Mexican operations moved $7 billion into the bank’s U.S. Money laundering prevention act 2012 operations. Anti money laundering measures Both Mexican and U.S. Penalty for money laundering authorities warned HSBC that the amount of money could only have reached such a level if it was tied to illegal narcotics proceeds, the report said.

HSBC had company in the Senate’s harsh spotlight — the report was also highly critical of the Office of the Comptroller of the Currency, a major U.S. 3 phases of money laundering bank regulator.

The OCC took enforcement action against HSBC in 2010, more than seven years after the Federal Reserve Bank of New York and the New York State Banking Department issued their own criticism of HSBC’s money-laundering detection systems.

Levin pounced on Grace Dailey, the former deputy comptroller for large bank supervision at OCC, demanding to know why more action had not been taken and sooner.

“We probably did not appreciate the systemic nature of some of those issues,” Dailey said. Money laundering act 2011 “We could have and should have taken formal enforcement action, with the benefit of hindsight.”

Levin was quick to dismiss the notion of hindsight and put one of his sharpest comments of the day to Thomas Curry, who took over as Comptroller of the Currency less than four months ago and who expressed his regrets for the OCC’s inaction.