Bloomberg News reports that within a year, its reform efforts met resistance from leaders of HSBC’s U.S. investment-banking unit - some of whom mounted a campaign of bullying, footdragging and discrediting against in-house watchdogs, according to previously unreported details from a report by the bank’s court-appointed monitor.
HSBC agreed to submit to the monitor’s oversight in late 2012, as part of a pact with the U.S. Justice Department that required it to bolster its in-house controls. Armed with that directive, HSBC compliance officers singled out a half-dozen clients whose activities could put the bank at risk - including a Saudi bank that had been linked to September 11, 2001, hijackers -- and advised the U.S. investment-banking division to consider dropping those relationships.
There was no indication that the U.S. managers jumped to investigate.
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