Friday, February 20, 2015

Lynch's Nomination Stalled Pending Determination of Whether She Received Leaked HSBC Info Before the HSBC Deal.

According to Law360 Loretta Lynch, President Barack Obama’s attorney general nominee, said Wednesday she had no knowledge of information that had been leaked to French authorities about HSBC Holdings PLC's possible assistance in tax evasion when she negotiated a controversial deferred prosecution agreement with the bank.

In response to written questions submitted by Senate Judiciary Committee Chairman Charles E. Grassley, R-Iowa, Lynch said that she had not received the documents leaked to French tax authorities in 2008 by Herve Falciani regarding HSBC’s Swiss private bank when she negotiated the December 2012 DPA with the British bank after a money laundering investigation. 

French authorities shared the documents with their counterparts in the U.K., the United States and Spain in 2010.

But the issue of what Lynch knew about the tax evasion assistance provided by HSBC’s Swiss unit has become a hot-button topic in the confirmation process for Lynch, who would take over for current Attorney General Eric Holder. We previously posted Clients of HSBC Geneva Are Named Publicly! where we discussed that the media has obtained the names of HSBC account holders, some of which will be named in a TV program to be shown by the British Broadcasting Corporation (BBC).  

The HSBC files, the biggest banking leak in history, reveal the full scale of malpractice at its Swiss subsidiary,  as more fully discussed in out post Another Offshore Whistle Blower - Former HSBC Employee! Recent court cases in the US and Europe have provided individual examples of the bank’s wrongdoing, but the leaked files show how these cases were part of a persistent pattern of misconduct.


The Senate Judiciary Committee put a hold on Lynch’s nomination that will extend through the current congressional recess as it awaited her response, regarding what she knew about the leaked documents, prior to offering HSBC their deferred prosecution agreement.

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