Senate Plans Hearing on HSBC Money Laundering Probe

WASHINGTON — A Senate investigative subcommittee has scheduled a July 17 hearing on HSBC's vulnerability to money laundering, as well as to drug and terrorist financing.

The Senate's Permanent Subcommittee on Investigations, chaired by Democratic Sen. Carl Levin, D-Mich., said in a press release it will use the British banking giant as a "case study" to examine the risks of money laundering when a U.S. affiliate of a global bank provides access to the U.S. financial system to high-risk correspondent banks, affiliates and clients.

The press release said representatives from HSBC and the Office of the Comptroller of the Currency will testify.

In January, Reuters reported that HSBC was the subject of a Senate investigation. On Monday, the news agency reported that HSBC is also under investigation by the Justice Department and the Securities and Exchange Commission with regard to its vulnerability to the flow of illicit funds. In 2010, HSBC was the subject of an OCC cease-and-desist order, alleging violations of the Bank Secrecy Act at HSBC North American Holdings and its subsidiary, HSBC USA.

HSBC spokesman Robert Sherman said Monday in an emailed statement that the British bank is fully cooperating with the Senate subcommittee and U.S. regulatory authorities. He added that the hearing will look at past anti-money laundering practices and HSBC's remediation and resolution of compliance matters.

"The Board and leadership of HSBC are fully committed to implementing the highest standards and have already made significant changes to our organisation's structure to bring this about," Sherman said.