HSBC compliance head quits at US hearing
July 18, 2012 - HSBC's head of compliance fell on his sword in front of a US Senate subcommittee Tuesday after the banking giant was excoriated for lax money laundering controls.
David Bagley quit his post after ten years in the job as the bank was subjected to a stinging attack by US politicians over its use as a conduit for Mexican drug money and terrorist financing.
In a damning report, the Senate committee slammed an inadequate compliance regime that appeared to consistently ignore warnings that the bank was being used as a major channel for money laundering. It follows a multi-year investigation that may yet see the bank slapped with criminal charges and up to a$1 billion in fines from multiple US Federal agencies, including the US justice and treasury departments and the Manhattan District Attorney's office.
In tendering his resignation, Bagley said that the bank was a victim of its own success, operating a compliance culture that was unable to keep track of events across its sprawling global network of offices and affiliates.
"The bank underestimated some of the challenges presented by its numerous acquisitions, and despite efforts to meet these challenges, we were not always able to keep up," he said in a written submission to the subcommittee.
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