A scathing U.S. Senate report charged that Europe’s largest bank exposed the U.S. financial system to money laundering by Mexican drug cartels as well as potentially illicit transactions involving Iran and other countries.
The extensive report on London-based HSBC Holdings PLC by the Senate Permanent Subcommittee on Investigations was released ahead of a hearing on Capitol Hill Tuesday morning. At that hearing, Irene Dorner, president and CEO of HSBC Bank USA, said “we deeply regret and apologize” for the lapses.
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. The chief compliance officer of Britain’s HSBC also said Tuesday he was stepping down from that position — though David Bagley told the Senate panel he will remain at HSBC.
The Senate probe focused on the bank’s key U.S. affiliate, HBUS, and said U.S. regulators knew the bank had a poor system to detect problems but failed to take action.
The sweeping allegations include accounts that two affiliates for years sent thousands of transactions through HBUS “without disclosing links to Iran” even though they were supposed to. For that period from 2001 to 2007, an auditor so far has uncovered nearly 25,000 such transactions involving billions of dollars. It’s unclear whether the transactions violated U.S. law, but the Senate report said that by evading safeguards, the affiliates “may have facilitated transactions on behalf of terrorists, drug traffickers or other wrongdoers.”
Fox News has the full article
