HSBC Delays Report On Money Laundering Even As U.S. Appeals

HSBC Building

HSBC is believed to have dealt with countries placed under sanctions and criminals attempting to launder money.

A U.S. based judge agreed to withhold making public a report that indicates that HSBC Holdings Plc deliberately slowed down with regard to improving its anti-money laundering compliance program after a $1.9 billion deal with the U.S. Justice Department.

Judge John Gleeson, on Wednesday, maintained that the report would not be made public, a decision that did not sit well with both the bank’s London branch and prosecutors who had been lobbying for its release and have appealed the judge’s initial ruling made at the beginning of the year which called for the revelation of a report produced by the federal monitor which was selected to participate in the deferred prosecution pact made in 2012.

The judge concurred as well that some parts of the report which had been released by prosecutor Michael Cherkasky at the beginning of last year would be censored in a bid to reduce the possibility of criminals who may exploit loopholes in the anti-money laundering and sanctions conformity programs, however the Judge did discard a large number of censoring proposals made by HSCB terming them as “over-inclusive.”

The bank had hoped to convince the judge to also consider redacting the conclusion reached by Cherkasky which claimed that the bank “moved too slowly and made too little progress toward instilling the type of culture it will need” in order to implement the necessary compliance regulations

In a statement, HSCB affirmed that the bank’s management team and board members were devoted to ensuring that reforms are being implemented and acknowledge that a lot still has to be done.

No comments were made on the issue at hand by the spokeswoman for the U.S. Attorney’s Office in Brooklyn.

The directive came as Gleeson completed his last day on the bench as he exited to join Debevoise & Plimpton law firm.

The pact determined charges that the bank transitioned into a “preferred financial institution” for Mexican drug criminals and other financial fraud seekers, and that it carried out dealings for customers in a number of countries which are under U.S. sanctions. Cherkasky was selected to be the federal monitor under the five-year deferred prosecution deal with the accused bank, however he is now operating as chairman of Exiger, a compliance firm. His report was to be strictly sealed.

However Hubert Dean Moore, a resident in Pennsylvania, requested that the report be revealed in order to facilitate his assessment as to whether or not the bank still engaged in financial malpractices, claiming that before filing for insolvency he was one of the bank’s mortgage customers.

The bank and the Justice Department have however been against the revealing of the report and hinted that they will appeal as they argue that such an action will pave a clear way for criminals who have the intentions of laundering money and as well as put people off with working with the monitor.

Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for with's FREE daily email newsletter.

Leave A Response