U.S. Tells HSBC to Improve Oversight
Author: Sara Schaefer MuÌ±oz</br></br>LONDON--U.S. authorities ordered HSBC Holdings PLC's North American unit to beef up its risk management and compliance with federal anti-money laundering laws after an investigation found the banking giant's procedures to be subpar.</br></br>Thursday's action, which came in the form of a "cease and desist" order from the Federal Reserve and the Office of the Comptroller of the Currency, is embarrassing because of the spotlight it shines on compliance lapses in a global bank with a cautious reputation and operations around the world.</br></br>The orders give the board of HSBC North America Holdings Inc., based in New York, 30 days to submit a plan to strengthen the unit's oversight of business risk management. The HSBC operation was ordered to "employ a permanent full-time" regional compliance officer for risk management. HSBC also must retain an outside consultant approved by the Fed to review the unit's compliance program.</br></br>The agreement announced Thursday included no fine, but HSBC could still face civil penalties down the road, regulators said.