HSBC compliance official resigns amid scandal
Anti-money laundering compliance has once again moved to the center of the stage, engulfing several top banks.
Some big drama played out earlier this week when an HSBC compliance executive tendered his resignation in the midst of testimony before a Senate hearing. In a surprise move, David Bagley, head of compliance for the bank since 2002, "broke from his prepared testimony" to tell the Senate Permanent Subcommittee on Investigations that "now is the appropriate time for me and for the bank for someone new to serve as the head of group compliance," according to DealBook.
The subcommittee had previously generated media coverage for its report that accused HSBC "of serving as a conduit for money flowing into the United States from Mexican drug traffickers and Middle Eastern banks with ties to terrorists."
The bank has pledged to make progress in this area, and top management has been turned over since the scandal broke in 2010. But some Senators took a few of the executives who were at the bank at the time of the infractions to task for allowing such practices to flourish. Christopher Lok, for example, the former head of HSBC's banknotes department, "was said to have pressed other executives at the bank to reopen the account of a Saudi Arabian bank with suspected ties to Al Qaeda.
During the hearing, Mr. Lok said that "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.' " It remains to be seen if banks will be punished for their AML sins more formally.
- here's the article
AML issues heat up again for banks