In 2002, HSBC purchased Grupo Financiero Bital—a Mexican lender lacking a compliance department at the time.
Five years later, the head of the British giant’s Latin America compliance department, voiced his frustration and concerns about the Mexico unit overseeing the acquired company’s activities, reports Financial Times.
Read: HSBC in talks to sell Latin American units, for more on how the bank tried to offload some its foreign units in May.
“I am quite concerned that the [anti-money laundering] committee is not functioning properly. Alarmed, even,” John Root wrote in an email to Ramon Garcia Gibson, head of compliance for HSBC’s Mexico unit.
He went to say Gibson was “rubber-stamping unacceptable risks” and that he and his colleagues needed to take a firmer stand.
It turns outs he had a reason to be anxious; the British lender may now face fines of over $1 billion, after probes by the US justice department uncovered money-laundering activity taking place at the bank.
Read: Drug cartels launder billions through HSBC U.S., compliance head steps down
While HSBC allegedly tried to tackle ongoing problems and investigate suspected activity, its efforts were insufficient. The main problem: the bank’s business interests were trumping its compliance obligations, says U.S. Senate investigators.
During the HSBC hearing Tuesday, Carl Levin, head of the Senate investigative panel, suggested dramatic measures be taken. He said authorities should consider revoking HSBC’s U.S. banking license since past messages and threats apparently failed to send the message.
Read: HSBC says Swiss bank data stolen, for more on some of the bank’s past troubles.