Courtesy of Pam Martens.
Christopher Lok, Former HSBC Head of Global Banknotes, Testifying Before Senate on July 17, 2012
On July 17 of this year, the Senate Permanent Subcommittee on Investigations released a 330-page report on banking giant HSBC, together with 100 documents and internal emails, evincing a culture of hubris and potentially criminal actions when it came to U.S. banking laws.
Today, the U.S. Department of Justice and multiple other U.S. regulators will tie all that up with a tidy red bow for a settlement of $1.921 billion; a small nick in HSBC’s profits of $22 billion last year. HSBC released a statement saying it was “profoundly sorry.”
During the July 17 Senate hearing on HSBC, Subcommittee Chairman, Carl Levin, questioned Chistopher Lok, the former head of global banknotes at HSBC Bank USA, about internal emails from HSBC that the Senate had in its possession.
In the first email, a subordinate tells Lok that a proposed bank customer has a “know your customer” profile that “documents various allegations of fraud, internal control weaknesses, and the FBI investigation into terrorist financing…” The colleague was inquiring if a special security status should be placed on this account. Lok responds in an email: “…this is such a large bank hence malfeasance is expected” and recommends no special security status. In a separate email exchange, Lok appears to base his recommendations on the amount of money HSBC might make from the account. Senator Levin inquires of Lok what kind of message this sends to his subordinates at the bank. Lok is humble in his response.
Later in the hearing, ranking minority member, Senator Tom Coburn, sends an equally conflicted message to the American people watching this hearing. Coburn asks the chief legal officer for HSBC, Stuart Levey, the following:
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