Page 10 - HSBC (D) Case Study
P. 10
Failure after failure at HSBC led to the bank being used as
a conduit for "drug kingpins and rogue nations", a 300-
page report compiled for a US Senate committee and had
found.
It was a bank, US prosecutors said, was guilty of 'blatant
failure' to implement anti-money laundering controls and
wilfully flouting U.S. sanctions.
Assistant attorney general, Lanny Breuer, told a press
conference in New York that Mexican drug traffickers
deposited hundreds of thousands of dollars each day in
HSBC accounts. At least $881m in drug trafficking money
was laundered throughout the bank's accounts and
facilitated hundreds of millions more in transactions with
sanctioned countries." (1, 3)
The penalty included a
deferred prosecution
agreement with the DOJ of five
years under which the bank
would install an independent
monitor to assess reformed
internal controls. Moreover,
the bank's top executives were to defer part of their
bonuses for the whole of the five-year period, while
bonuses have been clawed back from a number of
former and current executives, including those in the US
directly involved at the time.
