HSBC Probed For Allowing Laundering

It looks like some banks would do anything just to make sure their big-time clients keep their banking operations with them. HSBC is currently probed by the United States over charges such as allowing laundering and giving drug kingpins freedom to move their money into terror organizations.

On Tuesday’s hearing, several HSBC executives were questioned about the bank’s operations by the Senate Permanent Subcommittee on Investigations. HSBC, Europe’s largest bank, is said by lawmakers to have allowed Mexican drug kingpins to launder their money using the U.S. based division.

This Monday, a U.S. Senate report read that HSBC had a “pervasively polluted” culture, as it allowed laundering and terror organization funding by some clients. Billions of dollars were transferred to some of the world’s most risky regions, such as Syria, Saudi Arabia and Iran. Moreover, the report says HSBC U.S. allowed a significant transfer of Mexican drug money to pass through its accounts.

HSBC released the following statement to “We will apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong”.

But such a statement does nothing for the bank’s image. The Monday report damaged the company’s public image in the United States for years to come. It reads that during two years, HSBC Mexico moved some $7 billion in HSBC U.S. without paying notice to authorities’ warnings that kind of money must have came from illegal narcotics deals. Casa de Cambio Puebla, a foreign exchange dealer based in Mexico, was used in the money laundering process.

Senator Carl Levin of Michigan said HSBC has some good steps prepared to solve the issues, but the need for “accountability for past conduct is essential”. “…that is what is missing here” added the Senator. Carl Levin also blasted U.S. Office of the Comptroller of the Currency for tolerating HSBC’s poor practices.

Levin suggested HSBC should re-evaluate its affiliates and put those with a high risk under close monitoring. However, Levin had a much more aggressive suggestion when it came to HSBC’s Mexican affiliates. From his point of view, the back should end the partnership with the Mexican affiliate.

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Eli Wads is one of our expert authors in technology and business fields.Currently living in San Marino, Eli has graduated at Southwestern Academy with a Bachelor Degree in business in 2008. Contact him by dropping him an e-mail at

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