HSBC money laundering report's release delayed amid U.S. appeal

Thu Mar 10, 2016 12:26pm EST
 
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By Nate Raymond

NEW YORK (Reuters) - A U.S. judge has agreed to delay the release of a report that says HSBC Holdings Plc (HSBA.L: Quote) "moved too slowly" to enhance its anti-money laundering compliance program following a $1.9 billion pact with the U.S. Justice Department.

U.S. District Judge John Gleeson in Brooklyn, New York, on Wednesday stayed the release while prosecutors and London-based HSBC appeal his January ruling requiring the unsealing of a report by a federal monitor appointed as part of a 2012 deferred prosecution deal.

Gleeson also agreed to redact parts of the January 2015 report by former New York prosecutor Michael Cherkasky to, among other things, minimize risks that criminals would exploit weaknesses in the anti-money laundering and sanctions compliance programs.

But Gleeson rejected many of HSBC's proposed redactions as "over-inclusive."

Among the findings HSBC wanted redacted, Gleeson said, was Cherkasky's conclusion that the bank "moved too slowly and made too little progress toward instilling the type of culture it will need" to build an effective compliance program.

HSBC said in a statement that its board and management are committed to seeing through reforms that are being put in place.

"We recognize that significant work remains," HSBC said.

A spokeswoman for the U.S. Attorney's Office in Brooklyn declined to comment.   Continued...

 
The HSBC headquarters is seen in the Canary Wharf financial district in east London, Britain February 15, 2016.  REUTERS/Hannah McKay