Frankly, it is not enough for this tool to resign. He aided and abetted Islamic terror. He should go to prison, along with any bank collegues who were in on it.
Further proof of the narco-terror alliance in Mexico.
HSBC chief quits in front of US Senate committee as bank is accused of 'letting Mexican gangs launder $7 billion and working with Saudi bank linked to terrorism' Daily Mail, July 17, 2012 (thanks to David)
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 Another hammer blow to the credibility of British banking system after Barclays was fined for allegedly rigging LIBOR interest rate
The 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.'
Powerhouse: 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 at HSBC 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.
An HSBC facility in New Castle, Delaware. Executives insist that after years of run-ins with U.S. authorities over alleged anti-money laundering lapses, they have cleared up their act
The report caps a year-long inquiry that included a review of 1.4 million documents and interviews with 75 HSBC officials and bank regulators. It will be the focus of a hearing on Tuesday at which HSBC and OCC officials are scheduled to testify.
The bank and the regulator are expected to face tough questions at the hearing about how the abuses were allowed to continue, even after the OCC took regulatory action against HSBC in 2010.
An investigation found persistent lapses in the bank's anti-money laundering compliance since 2010.
In an emailed statement, HSBC said the Senate report had provided 'important lessons for the whole industry in seeking to prevent illicit actors entering the global financial system'.
The bank said it is spending more money on compliance and has become more coordinated in policing high-risk transactions.
Several HSBC executives are expected to testify, including the bank's chief legal officer Stuart Levey, who joined in January. He was previously one of the top officials on terrorism and finance at the U.S. Treasury Department.
HSBC plans to 'acknowledge and apologize' for failing to spot and deal with money laundering within the bank during a U.S. Senate panel hearing next week, according to an internal memo sent by its chief executive.
'It is right that we are held accountable and that we take responsibility for fixing what went wrong,' Chief Executive Officer Stuart Gulliver said in a note sent to staff.
The report also contained strong criticism of the OCC, saying the regulator failed to crack down on the bank despite multiple red flags, allowing money laundering issues 'to accumulate into a massive problem'.
Saudi terror links
terror funding? The probe has examined links between HSBC and the Saudi Arabian Al Rajhi Bank
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.
Then in late 2006, Al Rajhi threatened to yank all of its business with HSBC unless it regained access to using HSBC's bulk-cash transaction business, the Senate report said.
HSBC agreed to continue to provide the bank bulk shipments of U.S. dollars until 2010 when HSBC exited entirely the bulk-cash business.
Officials at Al Rajhi could not immediately be reached for comment.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.
Read the rest at the Daily Mail