Senate: HSBC Handled Drug, Iran Money
Report slams bank's 'pervasively polluted' culture
By Rob Quinn, Newser Staff
Posted Jul 17, 2012 3:02 AM CDT
Updated Jul 17, 2012 7:46 AM CDT
A sign for HSBC bank is seen at a branch in the City of London    (AP Photo/Sang Tan)

(Newser) – Terrorists, drug lords, and pariah regimes looking for a way into the US financial system found British banking giant HSBC willing to assist, according to a damning report from a Senate probe. The report, the result of a year-long inquiry, found that safeguards at the bank's American affiliate were woefully inadequate and the bank ignored warnings about its business partners' links to Saudi terrorist supporters, Iranian groups trying to dodge sanctions, and Mexican drug traffickers, Reuters reports. The report also slammed the US Office of the Comptroller of the Currency for failing to regulate HSBC properly.

"The culture at HSBC was pervasively polluted for a long time," said Sen. Carl Levin, chair of the Senate Permanent Subcommittee on Investigations. "Banks that ignore anti-money-laundering rules are a big problem for our country," he said. "But also troubling is a bank regulator that does not adequately do its job." HSBC issued a statement admitting it had "sometimes failed to meet the standards that regulators and customers expect" and saying it had taken "concrete steps" to change its culture. Execs from HSBC and the OCC will be grilled by lawmakers at a Senate hearing today, reports the Washington Post. The BBC adds that HSBC plans to apologize during that appearance. "We will ... acknowledge these mistakes, answer for our actions, and give our absolute commitment to fixing what went wrong," said the company in a statement.

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Showing 3 of 10 comments
Jul 17, 2012 7:05 PM CDT
Isn't that one - of the three banks - that Obama's bundler Hasan Nemazee - defrauded out of money? Hasan Nemazee was arrested on three different occasions for BANK FRAUD - scamming three different banks. Nemazee was on the Democratic Senatorial Committee - and was a bundler for Obama's 2008 presidential campaign and inauguration. Nemazee submitted FALSE loan applications - and submitted forged and fraudulent documents of his non-existent holdings. How can a man - defraud THREE Different banks - robbing them - from the inside - with phony paper?
Jul 17, 2012 10:14 AM CDT
The lure of easy money has a very strong appeal.
Jul 17, 2012 8:55 AM CDT
HSBC should be fined, at least a Billion. The Bank execs responsible, should be personally be fined the amount of this years or last years bonus, whichever is greater. And the Director of the US Office of the Comptroller of the Currency should be replaced for failing to regulate HSBC properly.