Business, Economics and Jobs

HSBC 'allowed drug money laundering', says US Senate


A shot of an HSBC building.


Laurent Fievet

HSBC is under fire.

The global bank provided a conduit for "drug kingpins and rogue nations", according to a US Senate committee investigating money laundering claims at the institution.

The 335-page Senate report released Monday said HSBC executives and regulators knowingly ignored warning signs and illegal behavior between 2001 and 2010, the New York Times reported.

Reuters wrote the suspicious funds were funneled through the bank from a number of countries including Iran, Syria and Mexico.

The BBC wrote at Tuesday's Senate hearings the Permanent Subcommittee on Investigations heard from HSBC executives who apologized and tried to explain the bank's shortcomings.

HSBC Executive Christopher Lok said he found it "painful and embarrassing to talk about where we fell short."

The head of group compliance, David Bagley, stepped down after he told the Senate the bank had "fallen short of our own and regulators' expectations" but said a major compliance overhaul is now in effective. Bagley said despite being the head of compliance, he did not have the full authority to act, the BBC reported.

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HSBC's net income last year was $16.8 billion. It operates in about 80 countries with assets of $210 billion in its US operations.

According to the Wall Street Journal, the Justice Department and HSBC have been in settlement talks and a deal is expected within the next few weeks.