HSBC now...bringing up the bodies

HSBC is being called out on its blatant failure to prevent money laundering. This widespread failure echoes Barclays Bank Libor fixing and other bank problems. What's wrong with this picture?

HSBC, JP Morgan, Barclays, MF Global, and PFG…what do all these firms have in common? Leadership that either looks the other way, doesn’t pay attention or purposely perpetuates fraud.

The news this week that HSBC had “lax” controls globally that allowed the bank to be used to launder illicit funds for many evil doers, from the Mexican drug cartel to Al Qaeda, shows the reason these “too big to fail” banks are largely “too big to manage.“ Further, perhaps these entities prove that glorified (and highly paid) leadership seems to lack any moral compass.

The Senate Permanent Subcommittee on Investigations released its year-long probe findings on money laundering on July 16. At the Senate hearing on July 17 on HSBC issues, current and former HSBC executives seemed to have been concerned, but not enough, about the problem. One former executive VP, when asked by Subcommittee Chairman Carl Levin (D-Mich), why he didn’t “just pick up a phone and raise hell?” when he was promoted to a position to take action against the money laundering, the exec said “in hindsight” he should have. Yes, and especially after 9/11, how the bank wasn't more wary of terrorist financing is beyond belief and borders on treason. In addition, the bank regulator, the Office of the Comptroller of the Currency (OCC), is under scrutiny for its failure to take action on the money laundering.

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