Obama’s first term AML report: charges brought, tick; penalties, cross

Proactive enforcement and large fines undercut by deferred prosecution agreements and a marked lack of individual accountability, at least publicly: President Barack Obama’s first administration promised much but disappointed. There are reasons, though, to remain optimistic about his second term, says Alan Osborn .

Much was expected on the anti-money laundering (AML) front from US President Barack Obama’s first administration. But the verdict of professional AML observers is that while important gains were achieved in some areas, the overall effect was blighted by a curious failure of will to follow through. In the eyes of many American AML specialists, for instance, there was a glaring mismatch between the aggressive exposure by federal agencies, such as the Department of Justice and local prosecutors such as the Manhattan district attorney (DA), of malpractices at major multinational banks like HSBC, and the relatively light punishments administered as a result (especially as regards criminal sentences). In its review of 2012, the Association of Certified Financial Crime Specialists (ACFCS), an organisation for private and public sector professionals controlling and detecting financial crime, highlighted what it regarded as “the dawn of ‘Bank Justice’…” This, it said, involved “major international financial institutions that are caught committing prolonged serious crimes [being] allowed to plea bargain with the US government, whose settlement terms are almost invariably, ‘cut a modest check, say you’ll sin no more, and no-one goes to jail.’” When America’s national bank regulator, the Comptroller of the Currency, found severe deficiencies in AML controls at HSBC in 2010 but did not take any direct action, Republican Senator Tom Coburn called the comptroller “a lap dog, not a watchdog.”