Where are the bosses who presided over HSBC’s years as banker to drug lords, terrorists and rogue states?
Britain’s biggest bank was forced to pay $1.9bn (£1.17bn) fine to settle allegations by US regulators that it allowed itself to be used to launder billions of dollars for drug barons and potential terrorists for nearly a decadeuntil 2010.
The US department of justice said HSBC had moved $881m for two drug cartels in Mexico and Colombia and accepted $15bn in unexplained “bulk cash”, across the bank’s counters in Mexico, Russia and other countries. In some branches the boxes of cash being deposited were so big the tellers’ windows had to be enlarged.
Chief executive Stuart Gulliver insists the bank is now under new management and will not make the same mistakes again – although both he and chairman Douglas Flint were in top roles while the money laundering activities were still going on. Gulliver and Flint are now giving more responsibility to group business heads – ending the policy that country heads of the bank’s outposts around the world should be “kings” of their businesses.
The US authorities said HSBC did not face criminal charges because the bank was too big to prosecute and no individuals were implicated. So where are the bosses who presided over HSBC’s years as banker to drug lords, terrorists and rogue states ?
1. Sir John Bond
Left HSBC in 2006 after 45 years. He was chairman of the bank between 1998 to 2006 and chief executive before that from 1998. After quitting the bank he became chairman of other major companies, including telecoms company Vodafone (until 2011) and mining company Xstrata. Last month he promised to step down from that role when shareholders rebelled against his plan to reward Xstrata’s top bosses with special bonuses totalling £170m as part of a plan to merge with rival Glencore.
2. Stephen Green
Left HSBC at the end of 2010 to take up a seat in the Lords and become a trade minister for the coalition government. He was chief executive of HSBC between 2003 and 2006 when he was promoted to chairman, the role he held until he joined the government. He is also a lay preacher and retains his role as a trade minister
3. Michael Geoghegan
Left HSBC as a result of Green’s decision to enter government. He was chief executive from 2006 and hoped to step up to chairman. But he lost out in an internal battle and quit after 37 years. In 2010, amid a row about bankers’ bonuses, Geoghegan diverted his £4m bonus to charity – one run by his wife Jania. He has since advised the Irish government on its “bad bank” Nama.
4. Sandy Flockhart
Spent four decades at HSBC before retiring in July this year, just before the US Senate levelled its first accusations about the bank’s operations in Mexico helping to facilitate drug barons. He had been head of the Mexican business from 2002 until 2006, then took on a job in Asia. He is now unwell.
5. David Bagley
The head of compliance dramatically resigned before the July Senate committee hearing although did not actually leave the bank until November. The register of individuals maintained by the Financial Services Authority now describes him as “inactive”.