The head of compliance at British banking giant HSBC resigned in front of a US Senate subcommittee today after it emerged the bank had exposed the US to billions of dollars worth of money laundering, drug trafficking, and terrorist financing.
David Bagley, who has been HSBC head of group compliance since 2002, stepped down before the Homeland Security and Governmental Affairs subcommittee after its findings were published.
The report by a US Senate committee claimed that HSBC provided banking services to some lenders in Saudi Arabia and Bangladesh believed to have helped fund al Qaeda and other terrorist groups. It found billions of dollars of cash from its affiliate in Mexico to the US, despite warnings that such sums could involve drugs proceeds.
It also identified that some of the money was linked to Iran - leading to speculation the bank could have violated sanctions against the counter, saying HSBC was used by "drug kingpins and rogue nations."
Mr Bagley, who had a 20 year career with the bank and is based in London, said: "Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators."
US officials believe drug cartels laundered money through the bank's US division between 2002 and 2009.