HSBC has reported in its public filings that it is the subject of multiple federal and state investigations and that it could be subject to significant fines and criminal penalties.
"We will acknowledge that, in the past, we have sometimes failed to meet the standards that regulators and customers expect," said a statement released by the bank in response to the Senate's report. "We will apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong." The bank said it has put new leadership in place to try and change its culture and its performance in monitoring transactions.
Advocates with several watchdog groups said that, as egregious as they believe the HSBC case is, numerous banks have failed to police themselves and monitor transactions they handle to make sure they are not helping criminals, terrorists and rogue states launder money.
"We have seen U.S. bank after U.S. bank involved in facilitating or turning a blind eye to criminal money coming in their doors, including the proceeds of corruption, terrorist financing and drug money," said Heather Lowe, Legal Counsel and Director of Government Affairs at Global Financial Integrity.
She and other advocates said the failure is not just inside the banks.
"This hearing is as much about regulatory oversight of the banking sector as a whole as it is about HSBC's alleged facilitation of criminal activity," said Stefanie Ostfeld, a policy advisor with Global Witness. "Hopefully, this hearing will prompt a proper law enforcement response, including appropriate jail time, for banks and individuals who are proved to be involved in this type of criminal activity."