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~ HSBC Chief Quits In Front of US Senate Committee: Laundered $7 Billion For Gangs ~
~ (From the article):
A US Senate probe has disclosed how lax controls at Europe’s largest bank left it vulnerable to being used to launder dirty money from around the world.
The report into HSBC, released ahead of a Senate hearing on Tuesday, says huge sums of Mexican drug money almost certainly passed through the bank.
Suspicious funds from Syria, the Cayman Islands, Iran and Saudi Arabia also passed through the British bank.
HSBC said it expected to be held accountable for what went wrong.
The report into HSBC was issued by the Senate Permanent Subcommittee on Investigations, a Congressional watchdog that looks at financial improprieties.
It also concluded that the US bank regulator, the Office of the Comptroller of the Currency, failed to properly monitor HSBC.
THE REPORT INCLUDES that HSBC moved huge sum from Mexico into the U.S. between 2007 and 2008:
* Provided services for Saudi Arabia’s Al Rajhi Bank linked to financing terrorism
* Senate investigation suggests they also moved money tied to Iran
* Accuses bank of ‘pervasively polluted’ culture
Head of compliance at British banking giant HSBC resigned in front of a US Senate subcommittee today after it emerged the bank had exposed the US to billions of dollars worth of money laundering, drug trafficking, and terrorist financing.
David Bagley, who has been HSBC head of group compliance since 2002, stepped down before the Homeland Security and Governmental Affairs subcommittee after its findings were published.
Mr Bagley, who had a 20 year career with the bank and is based in London, said: ‘Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators.’
HSBC headquarters in the City of London. The bank has been accused of laundering money for the Mexican mob
Earlier in the hearing, subcommittee chairman Senator Carl Levin said HSBC’s compliance culture had been ‘pervasively polluted for a long time’.
The revelations are another blow to the reputation of the banking industry following the current scandal over the manipulation of the Libor inter-bank lending rate.
An explosive report claims a ‘pervasively polluted’ culture atHSBC led it to act as financier to clients seeking to route shadowy funds from the world’s most dangerous and secretive corners, including Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria.
The Senate probe detailed how sweeping the problems have been, both at the bank and at the Office of the Comptroller of the Currency, a top U.S. bank regulator which the report said failed to properly monitor HSBC.
‘The culture at HSBC was pervasively polluted for a long time,’ said Senator Carl Levin, chairman of the U.S. Senate Permanent Subcommittee on Investigations, a Congressional watchdog panel.
The report comes at a troubling time for a banking industry reeling from a multi-country probe into the manipulation of global benchmark rates.
Last month, rival British bank Barclays Plc agreed to pay a $453 million fine to settle a U.S.- British probe into the rigging of the benchmark interest rate known as the London interbank offered rate, or Libor.
The Senate probe provides a rare look at how HSBC responded when confronted with numerous cases of suspect money flows.
~ (MORE From the article from the website):
http://12160.info/profiles/blogs/hsbc-ch...k-is-accus
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~ (MORE From Other Links):
HSBC let drug gangs launder millions: First Barclays, now Britain's biggest bank is shamed - and faces a £640million fine:
http://www.dailymail.co.uk/news/article-...-fine.html
~ (SNIP from the article):
Saudi terror links:
The Senate probe also examined banking HSBC did in Saudi Arabia with Al Rajhi Bank, which the report said has links to financing terrorism.
Evidence of those links emerged after the Sept 11, 2001 attacks on the United States, the Senate report said, citing U.S. government reports, criminal and civil legal proceedings and media reports.
In 2004, Al Rajhi sued the Wall Street Journal, which had published an article about U.S. and Saudi authorities monitoring accounts. The article referenced Al Rajhi.
Al Rajhi said in response to a WSJ story that it 'unequivocally condemns terrorism'. Al Rajhi and the paper settled in 2004.
The paper did not pay damages and stated that it 'did not intend to imply an allegation that (Al Rajhi) supported terrorist activity, or had engaged in the financing of terrorism', the Senate report said.
In 2005, HSBC told its affiliates to no longer do business with the bank, the report said. Four months later, HSBC officials reversed course, allowing affiliates to decide whether to continue to do business with Al Rajhi.
A Middle Eastern unit of HSBC continued doing business with the bank, the report said. HSBC ultimately stopped helping the bank handle certain types of transactions, and HSBC compliance officials rebuffed other HSBC bankers seeking to maintain ties to the bank.
~ (SNIP):
Dealings with Iran:
Some of the money that moved through HSBC was tied to Iran, the report said, which would violate U.S. prohibitions on transactions tied to it and other sanctioned countries.
To conceal the transactions, HSBC affiliates used a method called 'stripping,' where references to Iran are deleted from records. HSBC affiliates also characterized the transactions as transfers between banks without disclosing the tie to Iran in what the Senate report called a 'cover payment.'
HSBC 'failed to take decisive action to confront these affiliates and put an end to the conduct,' the report said.
Between 2001 and 2007, more than 28,000 transactions were identified by an outside auditor for HSBC that potentially could have run afoul of laws that prohibit transactions with sanctioned countries.
Of those, 25,000 involved Iran. A smaller number required additional analysis to determine if violations of U.S. regulations had occurred, the report said.
At the heart of HSBC's failings was the fact that it served as a hub for smaller financial firms needing access to the global banking system, the report said.
In one example detailed in the Senate investigation, HSBC continued to do business with one client that admitted to U.S. law enforcement that it had failed to maintain an effective anti-money laundering system.
The client, Sigue Corp, was a money processor in California, the report said. In 2008, the company agreed to a so-called deferred prosecution with the U.S. Justice Department and other U.S. agencies where it admitted to allowing millions of dollars of suspect transactions between 2003 and 2005.
Undercover U.S. officers, in a sting, even moved money through the company, explicitly telling Sigue agents they were moving illegal drug proceeds, the report said.
~ (MORE from the article from the website with VIDEO):
Read more:
http://www.dailymail.co.uk/news/article-...z211xJVLnj
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http://edition.cnn.com/2012/07/17/busine...index.html
http://legalnews.findlaw.com/article/02ll7Ppaoo6iS
http://www.standard.co.uk/business/busin...55976.html
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~ HSBC Chief Quits In Front of US Senate Committee: Laundered $7 Billion For Gangs ~
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