Group of Independent Advisers to Work With Directors, Particularly on AML Procedures.

[ by Melanie Gretchen ]

HSBC has recruited former crime and terrorism officials for its new board committee to improve oversight, after the British bank's $1.9 billion settlement over money laundering charges.  American authorities had charged the bank with having alleged connections to drug cartels (in Mexico) and terrorist organizations (Saudi Arabian banks).

And so, determined to establish a renewed focus on compliance and governance, the bank has staffed its new committee unit - dubbed the 'financial system vulnerabilities committee', with 5 independent advisers who will work with a group of directors, including:

• David Hartnett, a former British permanent secretary for tax, who retired last year;
• William Hughes, who led Britain's Serious Organized Crime Agency for 6 years until 2010;
• Juan Zarate, a former United States deputy national security adviser for combating terrorism;
• Nick Fishwick, a former British counterterrorism official;
• Leonard Schrank, the former CEO of Swift, the global financial messaging system

Statement by HSBC CEO.    CEO Stuart Gulliver issued the following statement about the new committee:   "The new committee, which will benefit from the experience of the expert advisers, will provide invaluable guidance and advice as we strengthen our capabilities and enforce the highest standards, in particular in relation to combating financial crime.  The caliber, status and experience of the individuals reinforce once more how seriously we are taking this."

Nevertheless, besides the scandal that prompted the committee's creation, expect scrutiny to continue following its progress – and members.  During his career as British permanent secretary, Mr. Hartnett was criticized in 2011 by British lawmakers for favoring corporate taxpayers, including Goldman Sachs, and overseeing a mistake in calculating interest owed

[C-I Note:  HSBC's latest effort may not be enough to overlook the British bank's $1.9 billion settlement over money laundering charges.]

For further details, go to [Dealbook, 1/30/13].