Top HSBC official resigns; bank apologises over money laundering scandal
Admitting massive shortcoming in its anti-money laundering operations, a top HSBC official on Tuesday informed a Senate panel his decision to step down and the measures being taken to address the issues raised by the Senate committee's investigative report in this regard.
Washington: Admitting massive shortcoming in its anti-money laundering operations, a top HSBC official on Tuesday informed a Senate panel his decision to step down and the measures being taken to address the issues raised by the Senate committee's investigative report in this regard.
"I recognize that there have been some significant areas of failure. I have said before, and I will say again, despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations, and the expectations of our regulators," David Bagley, head of group compliance HSBC Holdings Plc, told a key Senate panel during a Congressional hearing.
"This is something that a bank seeking to conduct business in the United States, and globally, must acknowledge, learn from, and most importantly, take steps to avoid in future," Bagley told lawmakers as he announced his resignation from the post that he has held since 2002.
"I recommended to the group that now is the appropriate time for me, and for the bank, for someone new to serve as the head of Group Compliance. I have agreed to work with the bank's senior management towards an orderly transition of this important role," Bagley said.
In his testimony, Paul Thurston, chief executive of Retail Banking and Wealth Management for the HSBC Group, said that the bank is now in the process of closing all of the HSBC Mexico accounts in the Caymans.
"We will continue to scrutinize our businesses in Mexico to determine how we can further mitigate compliance risk. We know that criminals operate globally and as an international bank, we will be a target. We have to be sure that we have the best and strongest defence in place in every business, in every market in which we operate regardless of the local challenges," he said.
Michael Gallagher, the former executive vice president at HSBC Bank US, told lawmakers that during his time at HSBC, there were steps taken to tighten anti-money-laundering controls and he understand that significant progress has been made in this regard since his departure.
"For me it is painful and embarrassing to talk about the areas where in hindsight, we fell short," said Christoper Lok, who served as the global head of the banknotes business at HSBC from 2001 to 2010.
"Over a period of years, there were some occasions when I communicated with my colleagues in compliance in a manner that was unnecessarily aggressive and harsh. These communications were unprofessional and I deeply regret them," he said.
"In retrospect, we did not adequately appreciate the concerns being raised about our business environment in Mexico. While we did our best to deal with these enquiries, I am sorry to say that I did not understand what later became apparent.
With the benefit of hindsight, it is now clear that we did not perceive the extent of the anti-money laundering deficiencies and the risks present in Mexico," Lok said.