DPA for HSBC Elevates the Compliance Officer Position and Gives the Position Independence

Board Directors and Chief Executive Officers Urged to Take Notice

MINNEAPOLIS, Dec. 17, 2012 /PRNewswire-USNewswire/ -- The Society of Corporate Compliance and Ethics (SCCE) commends the U.S. Department of Justice for supporting the separation of compliance and legal departments in the HSBC Deferred Prosecution Agreement (DPA) released on December 11, 2012 by the Department of Justice (DOJ).

SCCE urges corporate leaders and business executives and their directors to review this Deferred Prosecution Agreement and use it to evaluate their organization's compliance and ethics program and its compliance and ethics oversight duties.

The dollars attached to the settlement were so large that many missed the real news here for compliance programs.  Within the DPA were a number of points for companies to review. Chief among them is the splitting of the compliance and general counsel roles.

"The real question is, will industry give independence to the compliance officer before the government mandates independence through regulatory action as they have with auditors," said SCCE Chief Executive Officer Roy Snell.

"Also of significance is the elevation of the compliance function.  The Head of HSBC Group Compliance is now one of the top 50 executives in the company, making a very strong statement that compliance is now central to HSBC's leadership, not something separate from it," said SCCE Vice President of Membership Development Adam Turteltaub.

Background
On Tuesday, December 11, 2012, the DOJ announced in a press release that HSBC Holdings plc (HSBC Group) – a United Kingdom corporation headquartered in London – and HSBC Bank USA N.A. (HSBC Bank USA) (together, HSBC) – a federally chartered banking corporation headquartered in McLean, Va. – have agreed to forfeit $1.256 billion and enter into a deferred prosecution agreement with the Justice Department for HSBC's violations of the Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA).  According to court documents, HSBC Bank USA violated the BSA by failing to maintain an effective anti-money laundering program and to conduct appropriate due diligence on its foreign correspondent account holders.  The HSBC Group violated IEEPA and TWEA by illegally conducting transactions on behalf of customers in Cuba, Iran, Libya, Sudan and Burma – all countries that were subject to sanctions enforced by the Office of Foreign Assets Control (OFAC) at the time of the transactions. Link to the complete DOJ press release: HSBC Holdings Plc. And HSBC Bank USA N.A. Admit to Anti-Money Laundering and Sanctions Violations, Forfeit $1.256 Billion in Deferred Prosecution Agreement

About SCCE
The Society of Corporate Compliance and Ethics (SCCE) is a non-profit professional membership organization made up of more than 3,000 industry compliance professionals, and is based in Minneapolis, Minnesota. The organization exists to champion ethical practice and compliance standards, and to provide the necessary resources for ethics and compliance professionals and others who share these principles. Visit the SCCE website at http://www.corporatecompliance.org, Tel: 888-277-4977. Society of Corporate Compliance & Ethics is located at 6500 Barrie Road, Suite 250, Minneapolis, Minnesota  55435.

SOURCE Society of Corporate Compliance and Ethics

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