HSBC Face Money-Laundering Controversy

Global brand HSBC has issued an apology for the bank’s failure to implement anti-money laundering rules. In the wake of the controversy, one senior executive of the company has formally resigned.

HSBC, famous for its corporate tagline “World’s Local Bank,” is facing inquiry from US lawmakers for its alleged ties with Iran, drug dealers and terrorists. A 400-page report details how the bank is used as a financier for people who want to route illegal money from countries like Mexico, Syria and Iran.

In a statement, HSBC Bank USA president Irene Dorner said the bank regrets and apologizes for HSBC’s failure to live up to the expectations of its stakeholders like customers, employees, regulators, and the general public.

The bank president said that the company’s compliance history is unacceptable.

Dorner read the stament during a hearing conducted by the Senate Homeland Security Subcommittee on Investigation.

Before Dorner faced the inquiry, a senior executive of HSBC has stepped down. David Bagley was group compliance head.

In a statement, Bagley acknowledged that there was failure in different significant areas in the bank’s system and that it has taken the bank too long to resolve these issues.

The report showed that HSBC failed to guard the bank against money-laundering activities. These, in turn, allowed HSBC to conceal more than $16 billion worth of illicit transactions to Iran. Its executives were also aware of these transactions but allowed these to go one.

Based on a review of HSBC’s U-turn transactions, records showed that HSBC conducted close to $25,000 worth of transactions with Iran.