U.S. judge orders release of HSBC monitoring report


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A U.S. federal judge in Brooklyn ruled last week that a sealed report on HSBC’s efforts to remediate its AML Compliance be made public. HSBC has been working under a deferred prosecution agreement with the expectation that it improve its compliance outcomes related to anti-money laundering and counter-terrorist financing.

Most parties directly involved—including HSBC, the U.S. Justice Department, the U.S. Federal Reserve, and the U.K. Financial Conduct Authority—want the report to remain sealed. However, a former mortgage customer of HSBC filed suit to require release of the report.

Those opposed to release assert that making the report public will infringe on the privacy of certain HSBC employees and will have the effect of discouraging cooperation in this and future regulatory enforcements. Some also contend that release of the report will provide too much operational and risk-mitigation information to money launderers and terrorist financiers who want to exploit Compliance systems at HSBC and elsewhere.

U.S. District Judge John Gleason countered, however, that those concerns are unfounded due to the general nature of the report. Moreover, he provided principal participants with a two-week window during which they could propose redactions related to privacy concerns.

For more on this story, see the New York Times or download Judge Gleason’s full order here.