US appeals court blocks release of HSBC report on money laundering
A US appeals court on Wednesday blocked the release of a report discussing HSBC Holdings Plc’s progress in improving its controls against money laundering, reversing a judge’s order that the report be made public.
By a 3–0 vote, the 2nd US Circuit Court of Appeals in Manhattan said US District Judge John Gleeson abused his discretion in finding that the public had a constitutional right of access to the report under the First Amendment.
HSBC agreed to a monitor in December 2012, when it accepted a $1.92 billion fine and five-year deferred prosecution agreement (DPA) to resolve a US Department of Justice probe.
The department said HSBC had become a preferred bank for Mexican drug cartels and other money launderers and conducted transactions in several countries barred by US sanctions.
Wednesday’s decision was a victory for HSBC and the Justice Department, which have said releasing the report could compromise efforts to fight money laundering, including for terrorism, and discourage cooperation with law enforcement.
It was a defeat for Hubert Dean Moore, a Pennsylvania man who was an HSBC mortgage customer before filing for bankruptcy and sought the report’s release to identify whether there remained problems in HSBC’s business practices.
The report was kept under seal during the appeal.
HSBC, the Justice Department, Moore and Moore’s lawyer did not immediately respond to requests for comment.