Report: HSBC Will Tell Senate How Super Sorry It Is For Money Laundering

HSBC is reportedly all set to air its dirty laundry to a Senate subcommittee next week and will apologize to authorities for allowing money laundering to go on under its own roof. Get it off your chest, HSBC. It’ll feel so much better after you do.

HSBC is Europe’s largest bank, but its apology will be directed at American officials on Tuesday. DealBook obtained an internal memo from the bank, where HSBC chief  Stuart Gulliver discusses the plan to make amends for failing to prevent potential money laundering activities from going on at the bank.

“We will acknowledge and apologize for our past mistakes,” Gulliver wrote to employees in a memo, whose contents were confirmed by an HSBC spokesman. “Our anti-money laundering controls should have been stronger and more effective, and we failed to spot and deal with unacceptable behavior.”

Officials in both Washington and London are taking a closer look at similar activities at other banks. Barclays recently agreed to a $450 settlement over accusations that it had manipulated key interest rates.

Executives from HSBC will testify before the Senate subcommittee on Tuesday, with the focus point of the questions being how the bank failed to detect that any funny business was going on. The U.S. has been investigating HSBC for money laundering between 2004 and 2010.

The bank will also have to explain what steps it has taken to improve itself where internal risk management is concerned. It doubled its compliance budget to $400 million in the last two years.

HSBC to Apologize at Senate Hearing [DealBook]

 

Comments

Edit Your Comment

  1. nugatory says:

    Money laundering. So whos going to jail?

    • HomerSimpson says:

      You or I most likely….long before any of them do.

    • ARP3 says:

      Practically speaking, corporations can’t be convicted of a crime as long as they have policy against committing crimes. Otherwise, they just have poor processes, etc. Funny how I can’t say there was a breach in my money laundering reivew processes to avoid jail.

  2. tinmanx says:

    I hope they don’t consider me depositing cash “laundering.”

  3. Sarek says:

    We didn’t do anything wrong, and we’ll never do it again, cross our heart.

  4. bben says:

    As usual, NOBODY is responsible for anything that is illegal at a corporation. So if a corporation is a ‘person’ as the SCOTUS says who do we punish?

    Whenever any corporation gets into one of these situations where they are accused of being involved in illegal activities, the FIRST thing that should be done is the CEO should be required to step down and forfeit his golden parachute until the investigation is complete. Maybe it isn’t his fault directly, but it happened on his watch. This does not relieve him of any legal consequences if he is found to be responsible or negligent during ant investigation. After a few CEOs have been thrown under the bus, the others will pay a lot closer attention to any wrong doing going on in their company.

    • H3ion says:

      The problem with that approach is that the CEO may be blameless and the law only goes after the perpetrator. What might be an interesting approach is to treat the corporation as a “person”, and when the person is convicted, they should be sentenced. So say a three year sentence is imposed. During those three years the government takes over the perpetrator and all profits go to the government. Think that will stop a lot of shenanigans? You betcha.

  5. oldwiz65 says:

    If one of us had been involved in money-laundering we would be in prison for many years. Corporations can do it and know full well there is no personal responsibility. How is it that corporations want to be “people” when it helps them, but not when they are guilty of criminal behavior.

  6. VeryFroid says:

    “Barclays recently agreed to a $450 settlement over accusations that it had manipulated key interest rates.”

    It was $450 million. Quite a lot.
    It is a shame that media report such items as ‘the offender AGREED to ….’
    What that implies is that the offending company knows that the profit was in excess of the fine and finds the situation AGREEable.

    The fine should be of an amount that is thoroughly DISagreeable to the offending bank.

    What would be preferable would be, “Barclays, the offending bank and guilty party, has been fined an amount of 5000% of the executive bonuses due to the guilt of the bank and reckless lack of oversight of the executives. Barclays has limited chance of appealing due to the overwhelming evidence of being caught red handed. They have right of appeal to an open session of Parliament but are unlikely to opt for this due to the risk of disclosure of other underhand and deceitful actions”