US Judge agrees to delay HSBC money laundering report
Mar 11, 2016 02:20 AM EST
A US District Judge temporarily stayed the release of HSBC Holdings Plc's money laundering report that says the company made little progress to enhance its anti-money laundering compliance program following a $1.9 billion agreement with the US Justice Department.
On Wednesday, District Judge John Gleeson in Brooklyn, New York, agreed to redact portions of the report, while HSBC and prosecutors appeal his ruling which was made in January. According to New York Post, the report was expected to stay sealed until Hubert Dean Moore Jr., 52, a chemist living outside Philadelphia who has been locked in an argument with HSBC over a mortgage modification, asked Gleeson to make it public. Moore argued that the report could pertain to his case, and so the judge agreed.
HSBC then respectfully asked the Court to seal its March 9 order, says The Wall Street Journal. The bank maintained its position that the report should be kept confidential in its entirety. HSBC also said in a statement that its board and management are committed to seeing through the reforms that are currently being put in place and that the company recognize that significant work remains.
The order came on Judge Gleeson's last day on the bench. He was noted to be leaving to take a job at a law firm giant Debevoise and Plimpton. Meanwhile, former New York prosecutor and current executive chairman of compliance company Exiger Michael Cherkasky was appointed federal monitor as part of the five-year deferred prosecution agreement with HSBC Holdings.
Reuters reported that HSBC had become a 'preferred financial institution' for Mexican drug syndicates and other groups who commit money laundering and conducted transactions for clients in several countries subject to US sanctions.
While Cherkasky wanted the report to be sealed, Hubert Dean Moore of Pennsylvania, who said in a statement that he had been an HSBC mortgage client before filing for bankruptcy, asked it to be unsealed and disclosed. Moore wanted it to be reviewed whether the bank still engages in illegal business practices.
Both HSBC and the Justice Department have indicated they will appeal.