HSBC Hires Preeta Bansal as GC for Litigation and Regulatory AffairsCatherine Dunn Corporate Counsel
10-25-2012
Embattled financial institution HSBC Holdings plc is banking on Preeta Bansal to help continue an overhaul of its legal and compliance functions during a tumultuous year in which the bank has faced serious allegations of money-laundering and botched compliance. On Wednesday, the London-based bank announced that Bansal has assumed the role of global general counsel for litigation and regulatory affairs.
Bansal comes to HSBC from the White House Office of Management and Budget, where she served as general counsel and senior policy advisor from 2009 to 2011. Previously, Bansal chaired the appellate litigation and complex legal issues practice as a partner at Skadden, Arps, Slate, Meagher & Flom in New York. The Harvard Law School graduate also served as solicitor general of New York State, and as counselor to the assistant attorney general in the antitrust division at the Department of Justice.
In her new position, Bansal now reports to HSBC chief legal officer Stuart Levey—a former U.S. Treasury Department undersecretary who took the helm of the legal department in January. Bansal comes aboard as the bank contends with ongoing government investigations over alleged widespread anti-money laundering compliance failures, as well as issues related to the LIBOR interest rate fixing scandal.
In July, the U.S. Senate Permanent Subcommittee on Investigations blasted HSBC over “longstanding, severe” deficiencies in its money-laundering controls, alleging that the bank’s U.S. operations served as a conduit for Mexican drug cartels, and that the conglomerate circumvented U.S. prohibitions on terrorism financing.
During hearings, bank executives apologized for its institutional lapses, and HSBC’s compliance chief David Bagley announced he was stepping down. In a company report [PDF], HSBC also disclosed that it has set aside $700 million to handle possible fines and penalties in connection with the criminal investigations by U.S. law enforcement.
Amid all the turmoil, HSBC has initiated a major compliance overhaul aimed at standardizing controls for a sprawling bank that operates in approximately 80 jurisdictions around the world.
In April, HSBC group chief executive Stuart Gulliver announced an internal policy change to implement global standards and controls. The mandate is being led by CLO Levey, who oversees more than 750 in-house attorneys, and by group risk officer Marc Moses. Levey stressed the bank’s new focus on information sharing and worldwide due diligence in remarks to the U.S. Senate over the summer.
Bansal’s appointment marks Levey’s second hire of a former U.S. official with substantial private sector experience. In August, HSBC tapped Robert Werner as head of global standards assurance, a new role that includes leading an internal investigations unit, according to an internal bank memo [PDF]. Werner previously served as head of the U.S. Office of Foreign Asset Controls, and also held senior compliance roles at Goldman Sachs and Merrill Lynch.
At the White House, Bansal advised the Obama administration on financial regulatory reform. She holds a seat on the 10-member council of the Administrative Conference of the United States, a public-private partnership that advises on making improvements to the regulatory process.
Bansal grew up in Lincoln, Nebraska. Both she and Levey graduated from Harvard Law School in 1989. Bansal clerked for Justice John Paul Stevens at the U.S. Supreme Court and, in private practice, worked at Arnold & Porter and Gibson, Dunn & Crutcher.
See also: “Compliance Failures Frame HSBC Money-Laundering Risks,” CorpCounsel, July 2012.
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