HSBC’s $1.9bn money laundering settlement with US authorities could be rejected, leaving the bank open to criminal prosecution and a ban from operating in America

HSBC’s $1.9bn money laundering settlement could be rejected

HSBC’s $1.9bn settlement deal with US authorities over money laundering charges could be rejected, it was reported on Thursday night.

By Andrew Trotman

10:41PM BST 23 May 2013

Judge John Gleeson is considering cancelling December’s so-called deferred prosecution agreement that gave HSBC immunity from claims it allowed terrorists to move at least $881m (£584m) around the financial system. This could leaving the bank open to criminal prosecution and a ban from operating in America. However, HSBC disputes this. The US Department of Justice (DoJ) is reportedly challenging Mr Gleeson’s need to sign off on the deal. The judge last mentioned the case in February, stating that he had not yet approved nor disapproved of the settlement.In a statement, HSBC said: “For more than two years, our new leadership team in both New York and London has been implementing reforms and new controls, investing in compliance systems and staff, and putting in place the most effective global standards across our network to combat financial crime on a global basis.

“We are focused on taking all necessary steps to fulfill our obligation under the agreements with the US and UK governments, and on implementing effective global standards across HSBC.”

HSBC further disputes the rights of Mr Gleeson of the Eastern District of New York court to challenge the agreement it has previously reached with the DoJ.

The bank could provide further details at its AGM in London on Friday.

The settlement sparked anger among lawmakers, with attorney-general Eric Holder appearing to claim in March that HSBC had become too big to prosecute.

He said that some banks were “too large” and that inhibited the DoJ from bringing “resolutions that I think would be more appropriate”.

Mr Gleeson’s office declined to comment. The DoJ did not return calls for comment.

Meanwhile, Sir Simon Robertson, senior independent director and deputy chairman of HSBC, has been appointed to replace John Thornton as the head of HSBC’s remuneration committee. In addition, Joachim Faber, a non-executive director of the bank, is to replace Rona Fairhead as head of its group risk committee.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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