The numbers are startling. HSBC, the world’s fifth-largest bank, failed to review thousands of internal anti-money-laundering alerts, according to a Reuters investigation published last week.
The bank did not file legally required “suspicious activity reports” to U.S. law enforcement officials. It hired “gullible, poorly trained, and otherwise incompetent personnel” to run its anti-money-laundering effort. Each year, hundreds of billions of dollars flowed through the bank without being properly monitored.
HSBC is not alone. Last month, U.S. regulators accused Citigroup of having major lapses in its anti-money-laundering systems as well. Under an agreement with the Comptroller of the Currency, the agency that regulates national U.S. banks, Citigroup agreed to improve its monitoring operations, but did not pay a monetary penalty or admit any wrongdoing.
For critics of mega-banks, the reports are the latest sign of big banks’ ability to defy regulation, engage in dubious business practices and face few consequences.