NOVANEWS
April 2, 2015, The Guardian (One of the UK’s leading newspapers)
http://www.theguardian.com/
A senior HSBC executive has privately admitted that the bank is “cast-iron certain” to have another major regulatory breach in the future. Global head of sanctions Lee Hale … was meeting with independent lawyers monitoring HSBC as part of a controversial 2012 deal with the US Department of Justice, in which the bank avoided prosecution over sanctions-busting and money-laundering in its Mexican branch in exchange for paying a $1.9bn fine and receiving additional regulatory scrutiny for a period of five years. The deferred prosecution agreement was signed by the then US attorney for the eastern district of New York, Loretta Lynch. During a long exchange about HSBC’s new policy on sanctions and internal breaches of company rules, Hale told the regulator that “given the size and scale of HSBC”, in his view “it is a cast-iron certain[ty] this will happen, at some point in the future we’re going to have some big breach, some regulatory breach”. He added: “I hope it doesn’t happen, but it is likely.” The recorded monitor discussions also touched on problems in the bank’s US compliance team. Hale said: “The internal audit team have done a US review and it’s not great in terms of what they’ve found.” The findings, according to Hale, prompted the bank to terminate the employment of one of the bank’s senior compliance executives in New York, a former sanctions official at the US Treasury. In 2012, a US Senate report noted that a high turnover of compliance staff at the bank’s US subsidiary had made reforms difficult to implement.
Note: Read lots more on HSBC’s sweetheart deal with U.S. officials in a Rolling Stonearticle by Matt Taibbi. Is it even possible to root out corruption in a bank founded to service the international drug trade? For more along these lines, see concise summaries of deeply revealing news articles about systemic cor
