HSBC has become the latest British bank to have its reputation called into question.<br/> <br />A U.S. Senate committee into money laundering said the bank handled suspicious transactions, possibly for drug kingpins in Mexico, and rogue nations like Syria and Iran.<br/> <br />David Bagley is head of group compliance at HSBC.<br/> <br />SOUNDBITE: DAVID BAGLEY, HEAD OF GROUP COMPLIANCE, HSBC HOLDINGS, SAYING (English):<br/> <br />"Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators."<br/> <br />The Senate report said between 2007 and 2008, HSBC's Mexican arm moved 7 billion dollars into its U.S. operations.<br/> <br />Mexican and U.S. authorities warned HSBC that the amount of money could only have reached such a level if it was tied to<br/> <br />illegal narcotics proceeds.<br/> <br />David Cohen is the U.S. Treasury's Under Secretary for Terrorism and Financial Intelligence.<br/> <br />SOUNDBITE: DAVID COHEN: U.S UNDER SECRETARY FOR TERRORISM AND FINANCIAL INTELLIGENCE, SAYING (English):<br/> <br />"If this is dirty money you're trying to portary as clean funds being able to run it through the U.S. financial system helps you achieve that objective.<br/> <br />The hearing heard of the difficulty HSBC faced working in Mexico, where a drug war has claimed 40,000 lives since 2006 and kidnappings are common place.<br/> <br />Paul Thurston was HSBC's Mexico chief executive during 2007 when information about drug cartel money laundering became known.<br/> <br />SOUNDBITE: PAUL THURSTON, HSBC HEAD OF RETAIL BANKING AND WEALTH MANAGEMENT AND FORMER CHIEF EXECUTIVE OF HSBC MEXICO, SAYING (English):<br/> <br />"Unlike the United States, Mexico was a data poor environment, making it difficult to verify the identiy of customers. Some of things I saw took my breathe away. But every time I saw a weakness I tried to ensure we took action."<br/> <br />HSBC apologised, while its Head of Compliance told the hearing he was resigning from the post he's held for a decade.<br/> <br />SOUNDBITE: DAVID BAGLEY, HEAD OF GROUP COMPLIANCE, HSBC HOLDINGS, SAYING (English):<br/> <br />"I recommended to the group that now is the appropriate time for me and for the bank for someone new to serve as the head of group compliance. I have agreed to work with the bank's senior management toward an orderly transition of this important role. "<br/> <br />HSBC shares fell only slightly after the report was released.<br/> <br />But the bank is likely to face massive fines from U.S. regulators and perhaps worse, if it finds itself in the political crosshairs in an election year.<br/> <br />Andrew Potter, Reuters
