An Update on HSBC

Since I have such love and admiration for our old friend HSBC, I wanted to discuss a recent document released by the Justice Department on HSBC being 'too slow' in its promised reform since its 2012 deferred prosecution agreement for funding terrorist organizations. It seems, the same HSBC that is being charged with money laundering in its Swiss Branch has, to the surprise of many, been lazy in cleaning up its ethical activity. The stupidity that is required to think that this sort of display is having any effect on the bank's business behavior, and further, and any sort of serious investigation is being held, is tremendous. The cited article further discusses HSBC's main office's connection to the current Swiss Branch's investigation:

"The bank said the Swiss unit at the center of the tax-evasion allegations had a “different culture” that “was not fully integrated into HSBC,” being largely formed from acquisitions.

HSBC’s monitor said that top leaders at the bank are doing a good job of taking responsibility for the bank’s anti-money-laundering and sanctions compliance program, but criticized other staffers, the filing said. Senior managers at the U.S. unit’s global banking and markets business inappropriately pushed back against negative findings from internal auditors and others, the filing said. Individuals involved in this incident had their bonuses reduced."

Reassuringly enough, that other branch had nothing to do with them and we continue to keep our faith in HSBC in good order. What I really wanted to focus on is the heavy handed action taken by US Justice Department against those senior managers that pushed back against internal auditors, namely, the taking of their bonuses. Or rather, the reduction of their bonuses, so it seems that Bill in HR will not longer be able to afford the car of his dreams, and must now settle for a Porsche. There may still be hope though, it appears the Feds are having a difficult time accessing HSBC's computers:

"Mr. Cherkasky said the bank’s compliance technology remains “an area of material weakness,” the filing said. These systems are fragmented, which prevents bank investigators from easily reviewing customer records when evaluating suspicious activity. Mr. Cherkasky said these systems needed improvement in his initial report on the bank’s progress last year.

HSBC has good plans to improve these technology problems, but actually executing them will be “difficult, expensive and time consuming,” according to the filing."

Unfortunately, the burden once again falls on our friend to fund the upgrades required for their computers and how HSBC will manage to implement a task of such difficulty, time commitment and expense is beyond me.

Remember kids, crime doesn't pay.


P.S. Surprisingly, the kindly UK government appears to have forgiven many of the tax evaders in the HSBC laundering scandal.