HSBC share price: Publication of US anti-money laundering report likely to be delayed

on Feb 10, 2016
Updated: Oct 21, 2019

The release of a report detailing HSBC Holdings Plc’s (LON:HSBA)efforts to comply with anti-money laundering requirements is likely to be delayed, a US judge said yesterday.

Last month US district judge John Gleeson in Brooklyn, New York, issued an order requiring the unsealing of the first report by independent ‘monitor’ Michael Cherkasky, who was appointed as part of a $1.9-billion settlement of money-laundering charges between HSBC and the US Department of Justice in 2012. However, yesterday, Gleeson said that he was “very inclined” to grant the UK bank a stay of his order, delaying the release of the report until a federal appeals court could look into the matter.Gleeson also suggested that a lawyer representing the individual seeking the unsealing of the report would be unlikely to convince him otherwise.

“He’s going to have a tough road convincing me otherwise,” the judge said, as quoted by Reuters.
The request for the unsealing was filed by Hubert Dean Moore, a former HSBC mortgage customer, who wanted to review whether the banking giant “continues to engage in unsafe and unsound business practices”. The request was challenged by both the bank and the Justice Department, which sought to block the release of the report, arguing that its publication would make it easier for criminals seeking to engage in activities such as money laundering to exploit current weakness in the anti-money laundering mechanisms at HSBC and potentially other financial institutions. Both HSBC and the DoJ launched appeals against Gleeson’s subsequent order.
The temporary delay is a small win for HSBC, but the company is poised to face even more pressure for the report to be released. It emerged over the past few days that families of US citizens murdered by drug gangs in Mexico had launched a lawsuit against HSBC, claiming that the bank can be held responsible for the deaths because it let cartels launder billions of dollars to operate their businesses. The plaintiffs, represented by boutique civil counter-terrorism law firm Osen LLC, are also pushing for the unsealing of the report.
In today’s trading, HSBC shares were up 0.6 percent at 435.10p, as of 08:30 GMT. The stock has fallen 19.2 percent since the start of the year and the company’s market capitalisation currently stands at just over £86 billion.
As of February 08, 2016, the consensus forecast amongst 27 polled investment analysts covering HSBC had it that investors should hold their position in the company. The same consensus estimate has been maintained since January 20, 2016, when the sentiment of investment analysts deteriorated from “outperform”.
As of 09:50 GMT, Wednesday, 10 February, HSBC Holdings plc share price is 436.88p.