Hsbc Scandal and Money Laundering

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FIN 4634 1. What was the nature of the scandal, and which entities were laundering money? HSBC is one of the top British multinational bank and financial service company in the world. In July 2012, a U.S. Senator released an extensive report on HSBC on investigations of money laundering for Mexican drug cartels and moving cash for international banks with ties to terrorists. The nature of the scandal, HSBC provides money laundering service to Mexican drug cartels in Mexico by allowing them to make illegal transactions, such as deposit large amount of cash without supervise or oversight the transactions; including move money from the Mexican bank units to the U.S. bank units. Also, HSBC cycled money from Iran and Syria through the US branches in violation of the United States sanctions. Per the senate investigative committee, Mexican drug cartels transferred an approximately 7 billion dollar to the U.S. between 2007 and 2008. Since the bank has permitted billions to be laundered, it is now faces penalties of billions of dollars. The senate is also accusing HSBC of overlooking signs and warnings that would have clogged the money laundering from place like Iran and Mexico. The senate report alleges that from 2005, the HSBC violated the Bank Secrecy Act and other anti-money laundering laws on a massive scale. Many of the issues is that the bank maintained high risk account affiliated with suspected Mexican drug cartels such as the Casa de Cambio which is a place in Mexico for money laundering. And large cash transactions connected to Iran and other international countries under the U.S. economic sanctions. Many of HSBC employees claimed that the transactions were perfectly legal when they were not. The transactions violated the anti-money laundering policies and procedures. 2. Who is responsible for this scandal? (150 words). The
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