Apr 29, 2015
COMPLIANCE
HSBC Judge Orders DOJ To Turn Over Monitor Report
The judge overseeing HSBC Holdings PLC’s compliance with its anti-money laundering settlement has ordered the government to turn over a recent report on the bank’s progress.
Judge John Gleeson has directed the Justice Department to file the so-called “first annual follow-up report” on the bank’s progress with the court, according to court records.
Prosecutors previously filed a summary of that report with the court that said the independent compliance monitor, Mike Cherkasky, believed the bank is moving too slowly to fix some of its compliance problems.
Mr. Cherkasky did applaud the compliance efforts of top leaders and the bank’s adoption of strong anti-money-laundering standards around the world. But he said HSBC’s corporate culture and rusty technology systems are impeding the implementation of those standards. The report follows a review that included different lines of business and a number of countries.
The monitor’s report comes as the bank has spent handsomely and hired thousands of staffers in an effort to overhaul its controls in the wake of a $1.9 billion settlement over allegations it violated laws against money laundering.
When Judge Gleeson in 2013 approved the deferred prosecution agreement the bank entered into as a part of that settlement, he said he would continue to supervise the case during the term of the agreement. He also noted there was criticism of the deal–namely that the U.S. government should have sought to hold HSBC criminally liable.
A Justice Department spokesman said the department is reviewing the order. An HSBC spokesman declined to comment.
Write to Rachel Louise Ensign at rachel.ensign@wsj.com