HSBC under investigation over its hiring practices in Asia
Feb 23, 2016 05:53 AM EST
HSBC made a statement on Monday that it is under scrutiny by U.S. regulators. They are reportedly assessing the bank's hiring practices in Asia, as it reported that some areas of its bank investment are struggling.
According to Bloomberg, Europe's biggest bank, HSBC Holdings Plc, said that it belonged to financial institutions being probed by the U.S. Securities and Exchange Commission because of its hiring practices in the Asia Pacific. HSBC said that during its Hong Kong exchange statement that the investigation of the bank is in relation to the hiring candidates who are referred by or related to the government officials or employees of state-owned companies in Hong Kong.
The London-based lender had also obtained different requests for information and is working together with the SEC. "Based on the facts currently known, it is not practicable at this time for HSBC
to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant," the bank wrote in a statement.
Reuters also reported that the bank made a warning that a U.S. monitor who is examining its anti-money laundering and approval compliance, following its US$1.9 billion charges for breaching sanctions in 2012, was unhappy with its progress. In fact, in a report made on January expressed that the monitor displayed important concerns regarding the pace of the progress, instances of potential financial crime and systems, as well as controls deficiencies.
But HSBC is promising that it is still on the process of improving its system and it is still under progress. It also added that it will be introducing an improved global system this year. It even claimed that it already added 2,500 compliance staff in 2015 and is now adding 9,000 people compared with 1,600 people in 2010.
The investigation began in 2013 in order to know whether hiring practices at some banks, including J.P. Morgan, had violated the U.S. Foreign Corrupt Practices Act. The move to probe these banks insists that it is illegal for companies to give officials and employees of state-owned firms anything of value to trade for business deals, as mentioned in CNN Money.
HSBC also stated that it will keep its headquarters in London after a 10-month of assessment of its residence. But is also warned of the 1,000 and above of its GBM staff that they could be relocated from London to Paris, that is, if Britain votes to leave the European Union in a referendum set on June 23.
Meanwhile, the bank's statement on the investigation came as it reported its fourth-quarter's loss amidst the lower income from lending and higher loan impairment charges. But the HSBC spokesman, Gareth Hewett, made no further detail regarding the bank's enquiry.