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HSBC Money Laundering Report: Should It Be Released to the Public?

March 2, 2017

Did a Brooklyn federal judge overstep his authority when he ordered the release of a report on how HSBC is working to improve its money laundering controls? Reuters reports that lawyers for the U.S. government and HSBC are using that argument in a federal appeals court. A lawyer representing the HSBC mortgage customer who moved to unseal the report countered that it should be released in part because of "huge public interest in understanding what is happening in this case."


In 2012, HSBC agreed to pay a $1.92 billion fine and to be monitored by former New York prosecutor Michel Cherkasky, now the executive chairman of the compliance company Exiger, for 5 years to settle charges that HSBC violated U.S. sanctions laws and failed to stop Mexican and Colombian cartels from laundering hundreds of millions of dollars in drug proceeds through the bank.


Under the deal, Cherkasky's reports on the bank's progress have not been public. entered. However, Hubert Dean Moore, an HSBC mortgage customer, moved to release one of the reports in late 2015. U.S. District Judge John Gleeson, who was overseeing the deferred prosecution agreement but has since left the bench, granted Moore's motion last year.


One of the government’s concerns with releasing the report is that it would hinder the government’s efforts to enforce the deferred prosecution agreement. One of the judges on the panel expressed skepticism of that argument,.