The government had selected independent monitor
and former New York prosecutor Michael Cherkasky to monitor
HSBC's compliance with the agreement. The Tuesday report
describes Cherkasky's conclusions to date.
"Based on his Initial Review and subsequent conversations with
the Bank, the Monitor believes that the leadership of HSBC Group
is appropriately committed to addressing the Bank's longstanding
compliance deficiencies," the Justice Department said in the
It added that Cherkasky, who hired dozens of experts to help
him, found that many of the bank's actions to correct anti-money
laundering deficiencies "did not begin in earnest until early
2013," after it entered into the agreement.
HSBC reportedly disputed that finding and "maintains it did act
promptly to begin remediation efforts prior to 2013," the court
More than two years prior to the agreement, an order by HSBC's
regulator, the Office of the Comptroller of the Currency, cited
failures to properly police high-risk cash transactions and
ordered anti-money laundering improvements.
HSBC spokesman Rob Sherman declined to comment.
Cherkasky's findings, which the filing said were made based on
unverified information provided by HSBC, suggested the bank must
improve the reliability of the data it gathers on its customers
and the manner in which that information is shared among
Cherkasky also found that HSBC must better integrate its various
IT and transaction monitoring systems, the filing said.
(Reporting by Brett Wolf; additional reporting by Aruna
Viswanatha; editing by Leslie Adler)
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