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AML Compliance Back in the Spotlight

Joe Mont | July 31, 2012

Well, one explosive report about drug cartels and terrorist groups funneling money through U.S. banks, plus one compliance officer announcing his resignation during a U.S. Senate committee hearing, and presto—anti-money laundering efforts, and the lack thereof, are back in the news.

The specific bank on the anvil of public discontent right now is HSBC, the subject of a year-long investigation into allegations that Mexican drug cartels and terrorist groups used the bank for money laundering. That led to a hearing on July 17 by the Senate Permanent Subcommittee on Investigations, where HSBC compliance chief David Bagley announced that his head would be among the first to roll. It is not likely to be the last; the Justice Department has also initiated criminal investigations.

HSBC subsequently announced it will set aside $700 million to cover any fines, settlements or legal fees it might incur from the Senate investigation. That is on top of $1.3 billion earmarked to...

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