HSBC braced for criticism over anti money-laundering

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The bank has spent millions of pounds and recruited hundreds of extra compliance and legal staff after its $1.9 billion (£1.3 billion), five-year deferred prosecution agreement with the DoJ in 2012.

But the monitor, Michael Cherkasky — who criticised several banks in the summer — is expected, in his six-monthly report to the DoJ, to say that HSBC could be doing more and suggest ways it could improve.

Although his reports are not public, their findings often find their way out of the DoJ.


HSBC’s chief legal officer Stuart Levey said the criticism would come as no great surprise.

“It’s hard to imagine that we would have a monitorship where, after two years, they’re not saying, ‘You have more to do’,” he told the Wall Street Journal.

He said that the bank remained “on track to meet the terms of the monitorship and deferred prosecution agreement” and was “making excellent progress on anti money-laundering”.

Banking sources said it was highly unlikely that HSBC would face further penalties despite the criticism.

Rival, Standard Chartered, was ordered to make a grovelling apology through its chairman Sir John Peace when it criticised the DoJ two years ago after it was punished for sanctions busting.

HSBC has been very careful to make no criticism of the regulators or the monitor.

HSBC has almost 25,000 employees, or 10% of its worldwide workforce, in compliance and legal roles.

It also created a high-powered Financial System Vulnerabilities Committee to oversee not just anti money-laundering but also tax affairs, possible terrorist funding and relationships with governments and regulators.

It is chaired by former head of MI5 Lord Evans of Weardale and includes a former US prosecutor.

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January 14, 2015 |
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