Plagued by US Senate ‘s accusations on HSBC’s money laundering acts, David Bagley, a senior executive at HSBC, resigned from his post, after the bank admitted to years of failure to comply with the regulations to prevent money laundering.
David Bagley, who has been HSBC head of group compliance since 2002, said that “despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators … I recommended to the group that now is the appropriate time for me and for the bank, for someone new to serve as the head of group compliance.”
The head of compliance also announced that HSBC will be closing down businesses in secret corners of Cayman Islands as a part of renewed compliance efforts, which, however, did not soften the Select Committee that alleged that the bank sacrificed propriety for profits.
Senator Carl Levin, who chairs the panel, read what he said was a 1993 statement from HSBC that asked its group members to comply with the letter and spirit of laws, and said it sounded similar to the commitments offered by HSBC on Tuesday.
“Do you agree, given past commitments have not been kept, that the bank has a heavy burden of proof that they mean what they say?”, Levin asked the panel of witnesses consisting of HSBC’s top legal officer and the head of HSBC’s US operations.
The Senator grilled the HSBC officials on whether they deliberately turned a blind eye to suspicious activity if it meant profits.
“Your test apparently for opening an account is first, how much revenue it would produce. But what about the second test Mr. Lok?” Levin asked former executive Christopher Lok, adding, “What about a test of, is the bank involved in wrongdoing?”