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HSBC compliance head quits

HSBC Interior Alternate 450

HSBC head of group compliance David Bagley is to step down from the role.

Bagley was giving evidence today in a United States senate permanent subcomittee on investigations about a case history of US vulnerabilities to money laundering and terrorist financing.

He said: “I recommended to the group that now is the appropriate time for me and for the bank, for someone new to serve as the head of group compliance. I have agreed to work with the bank’s senior management towards an orderly transition.”

Bagley was giving evidence after a report published by the senate permanent subcommittee on investigations argued that poor anti-money laundering controls at the group and its local affiliate HSBC Bank USA allowed the US financial system to be exposed to money laundering, drug trafficking, and terrorist financing risks.

The report says large sums of Mexican drug money likely passed through the bank. Between 2007 and 2008, the bank’s Mexican operations moved $7bn into its US business, which the report claims could only occur if illegal drug proceeds were involved.

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