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UK trade minister drawn into HSBC money laundering scandal

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by Jan Harris
UK trade minister drawn into HSBC money laundering scandal

UK trade minister, Lord Green, will have to answer some “serious questions” over HSBC’s involvement in money laundering, Chris Leslie, the shadow financial secretary to the Treasury, said.

Lord Green was chief executive of HSBC from 2003 and 2006, and was chairman until 2010 when he resigned to become part of the coalition government.

A year-long investigation by the US Senate found that HSBC laundered billions of dollars for drug gangs and possibly terrorists, from countries such as Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria.

It is not known if the Prime Minister was aware of the allegations against HSBC before appointing Lord Green, but Labour MP John Mann has called Mr Cameron’s judgement into question.

“Someone whose bank has been assisting drug cartels and corrupt regimes should not be in charge of a government portfolio,” Mr Mann said.

The Senate enquiry into HSBC revealed a “pervasively polluted” culture at the bank, with problems stretching back for nearly a decade.

Its report said that HSBC allowed the money laundering to occur through a lack of internal controls.

The bank’s compliance section had failed to function properly, the report said.

David Bagley, HSBC’s head of compliance for the past 10 years resigned during the US Senate hearing over the matter.

HSBC had been warned by US bank regulators over its deficient anti-money laundering policies on two occasions while Mr Bagley was in charge of compliance.

Further investigations are being carried out by the US Justice Department, the Treasury department and the Manhattan district attorney.

HSBC could be fined $1 billion for offences committed between 2004 and 2010.

The London-based bank is one of the largest banking and financial services organisations in the world with 7,200 offices in over 80 countries and territories.

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News posted: July 19, 2012

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