Page 122 - Flip Banks TG

Culture & Fraud

DPA: Don’t do it again! Again! Again!

It cost the HSBC $1.9bn in fines and put it under a deferred

prosecution agreement (corporate probation period). For

Gulliver this meant that over the period of his stewardship

he had to ensure that HSBC and its staff adhered to ethical

standards and introduced procedures to ensure their
compliance.

In essence, Gulliver created a single company by instituting

a cultural change. This change destroyed the historic

federation of businesses through centralising control and

abandoning the regional fiefdoms that had marked the

historic structure and operations of HSBC.

December 2017 witnessed the lifting of the DPA. This along

with the cultural changes and the restructuring made HSBC

a more attractive investment prospect especially as its

slimmed down operations began to produce results based

on greater efficiencies, lower costs and greater profitability.

The bank is hardly in the clear, having also reached a

$101.5m settlement with US authorities over attempts to

manipulate forex markets. This included a three-year DPA,

but one less onerous as there is no external monitor for the

bank.