Following a yearlong U.S. Senate investigation, allegations have been made against HSBC Holdings (NYSE:HSC), Britain’s largest bank, for money-laundering, terrorist funding and tax evasion. Here are a few key details about the scandal:
- Activities included more than $30 billion in suspect transactions linked to sanctioned companies in Iran, North Korea and Burma.
- HSBC’s Mexico branch was the most glaring issue in the report. Almost a quarter of the $30 billion was bulk cash going from the Mexico branch to the U.S. branch that was shipped despite warnings that client accounts were being used for laundering of drug cartel and other illicit funds, The Wall Street Journal reports.
- On top of that, nearly a third of the problematic transactions involved Iran or Iranian companies, while up to 90% percent of those did not disclose ties to the sanctioned regime.
- Regulators were also criticized. The U.S. government regulator, the Treasury Department’s Office of the Comptroller of the Currency, for example, had come across many problems with the bank over the years but did not take strong enough action — a shortcoming the report called “systematic failure” in the organization.
- Head of compliance David Bagley, who was in charge of the bank’s anti-money-laundering programs, has stepped down in wake of the controversy.
-Alyssa Oursler, InvestorPlace Editorial Assistant