Ethics Training Cuts Illegal Activities Off at the Pass
The media is currently rife with examples of companies who failed to maintain ethical practices under their own roofs. The LIBOR scandal is front and center while the full extent of HSBC's money laundering scheme is finally becoming pubic knowledge. It is cases such as these that make a sound argument for the necessity of ethics training in the corporate world.
This week the findings of the Senate investigation into HSBC's money laundering highlighted lax controls and ignored warnings as the most likely causes for the institution's association with a variety of nefarious individuals. Even as the banking giant is reaching terms of a settlement with the government, the sheer numbers of the debacle are staggering. According to "HSBC’s Money Laundering Lapses, By the Numbers," the magnitude of the company's unethical behaviors stretch back more than ten years. While more than a decade is plenty of time to stockpile poor habits, the investigation's findings truly illustrate the long-reaching implications of corporate deci sions that disregard ethical practices.
In 2010 government regulators uncovered some 17,000 unreviewed "potentially suspicious activity alerts" at HSBC's US extension. That means that potentially 17,000 illegal transactions still took place after a warning had been given. Either the employees were completely lackadaisical in their protocol or they were maliciously involved in the plot. Either way a serious breach of ethical conduct was made by the staff.
While HSBC employed some 16,000 people overall, they only kept a staff of about 200 in their compliance unit. Even though the bank alleges that it kept the compliance department small to save money, a more proactive ethical code would have demanded a larger staff for this most important concern. All too often such small numbers in the inner circle simply means more ease in hiding the ugly truth.
Between 2005 and 2010, the US branch had 85 individual "red-flagged" anti-money-laundering concerns raised by the OCC. The corruption was so thick in this organization that this number is 1/3 greater than the next problem institution.
In this time frame, the US extension of the bank accepted $15 billion as part of cash transactions from foreign HSBC banks with zero money laundering procedures in place.
Every time a story like this breaks, the public questions the ethical fiber of those institutions they choose to support. You need to be able to give yourself and your client the genuine assurance that your organization is free from making the same errors.
Please contact us today so that we may solidify the public's well-placed confidence in your business.