HSBC Holdings PLC confirmed Wednesday that it is under investigation by a U.S. Senate panel in connection with money laundering, the latest in a series of official inquiries.
The U.K.-based bank said the probe was one of a number of regulatory and compliance matters it is talking to U.S. regulators about as it had disclosed in a company filing Nov. 9.
"We have ongoing discussions with officials [including the U.S. Senate Permanent Subcommittee on Investigations] on a number of issues," an HSBC spokesman said. "The nature of these is confidential and in all cases we are cooperating."
A spokeswoman for the Senate panel declined to comment.
The relevant part of the filing, which was disclosed in HSBC USA Inc.'s third-quarter statement, is headed "Anti-Money Laundering, Bank Secrecy Act and Other Compliance Matters" and refers to investigations into the bank's bank-note business and dollar-clearing services, its compliance with Office of Foreign Assets Control requirements, and adherence by certain customers to U.S. tax-reporting requirements.
While it isn't clear if the current probe relates to past issues with the bank, U.S. regulators have long had problems with HSBC's compliance with American anti-money-laundering laws. In 2010, authorities ordered HSBC Holdings' North American unit to beef up its risk management and compliance with federal anti-money-laundering laws after an investigation found the global banking giant's procedures to be subpar.
In October 2010, the Federal Reserve and the Office of the Comptroller of the Currency, gave the board of HSBC North America Holdings Inc., based in New York, 30 days to submit a plan to strengthen the unit's oversight of business risk management.
The HSBC operation was ordered to hire a permanent full-time regional compliance officer for risk management and to retain an outside consultant approved by the Fed to review the unit's compliance program.
In April 2003, HSBC's U.S. unit entered into an agreement with the Federal Reserve Bank of New York and New York's state banking regulator to improve its compliance with anti-money-laundering requirements after regulators found deficiencies in HSBC's anti-money-laundering policies.
HSBC was required to review its cash transactions, sales of monetary instruments and fund transfers in its retail operations to determine if suspicious activity was properly identified and reported.
Later that year, HSBC appointed Teresa Pesce, chief of money-laundering prosecutions at the U.S. attorney's office in Manhattan, as an executive vice president with responsibility for overseeing the bank's efforts in the U.S. to combat money laundering.
