Tom Burroughes
Group Editor
11 July 2012
Daily News Analysis
HSBC is to apologize at a forthcoming US Senate hearing for anti-money laundering controls that were not effective enough, Bloomberg reported, citing an internal memorandum it has seen about the matter.
“We failed to spot and deal with unacceptable behavior,” chief executive Stuart Gulliver reportedly says in the memo sent to staff yesterday. His comments referred to a period between 2004 and 2010. “It is right that we be held accountable and that we take responsibility for fixing what went wrong,” the note continued, according to the report.
US legislators are to question the bank on 17 July. US prosecutors may take criminal or civil enforcement measures involving the bank amid an investigation into terrorist funding, HSBC said in February this year. The lender has more than tripled the size of its US compliance team and said it will exit businesses it sees as too risky.
The report said that HSBC declined to comment on the memo, but noted that the UK/Hong Kong-listed bank has been co-operating with US regulators about the matter.
Regulators have continued to punish banks for offences relating to anti-money laundering. For example, in the UK, the Financial Services Authority, fined Switzerland's Habib Bank £525,000 ($842,500) and one of its former employees £17,500 for anti-money laundering system control failings. The regulator said in a statement that the shortcomings at the Swiss bank lasted almost three years and exposed the firm to unacceptable risk. In March, Coutts was fined £8.75 million (around $13. 8 million), for failing to take reasonable care to establish and maintain effective anti-money laundering systems and controls relating to high-risk customers, including “politically exposed persons.”
