A top executive at the banking giant HSBC has resigned in the wake of a report linking the firm to money laundering for Mexican drug cartels. A Senate probe also found loose protections at HSBC’s U.S. unit provided a "gateway for terrorists to gain access to U.S. dollars and the U.S. financial system." On Tuesday, David Bagley, the head of compliance at HSBC, announced his resignation and apologized in testimony before a Senate hearing.
David Bagley: "I recognize that there have been some significant areas of failure. I have said before, and I will say again, despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators. This is something that a bank seeking to conduct business in the United States and globally must acknowledge, learn from and, most importantly, take steps to avoid in future."
The Justice Department has confirmed it is investigating HSBC for criminal wrongdoing. Also speaking on Tuesday, Michigan Democratic Senator Carl Levin noted that the alleged improprieties at HSBC have been ongoing for years.
Sen. Carl Levin: "The recent commitments are welcome. Apologies and commitments to improve are also welcome. But accountability for past conduct is essential, and that’s what’s been missing here."
The report on HSBC comes amidst widespread scandals in the global financial sector, including news the British bank Barclays manipulated the key global interest rate, Libor.