London-based HSBC apologised Tuesday for failing to apply anti-laundering rules as US lawmakers accused it of giving Iran, terrorists and drug dealers access to the US financial system.
Its shares listed on the Hong Kong stock exchange fell 2.36 percent to HK$66.35 in morning trade, while the Hang Seng index slipped 0.77 percent.
“We deeply regret and apologise for the fact that HSBC did not live up to the expectations of our regulators, our customers, our employees, and the general public,” HSBC Bank USA (HBUS) President Irene Dorner told a hearing of the Senate Homeland Security Subcommittee on Investigations.
“HSBC’s compliance history, as examined today, is unacceptable.”
Before reading his own testimony, David Bagley, the head of group compliance for HSBC, stepped down from his post in the wake of the subcommittee’s report on the bank’s operations.
“I recognise that there have been some significant areas of failure,” he said. “This clearly took far too long to resolve.”
The Senate report found that HSBC had allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the United States without adequate controls.
Lawmakers said money laundered through HSBC-linked accounts benefited Mexican drug lords and terrorist networks, and skirted US sanctions on Iran.
“It’s pretty shocking stuff,” subcommittee chairman Senator Carl Levin said.
Among the findings was the revelation that HSBC and its US affiliate concealed more than $16 billion in sensitive transactions to Iran.