HSBC will have to air its dirty-money laundry.
A Brooklyn federal judge ruled Thursday that the public has the right to see a sealed report that HSBC fought tooth and nail to keep private that details the bank’s failures to catch and prevent money laundering, among other violations.
The 250-page report was prepared by an outside bank monitor as part of HSBC’s settlement with the Justice Department in 2012 over money laundering for Mexican drug cartels.
The DOJ, as well as the monitor who prepared the report, former prosecutor Michael Cherkasky, had also opposed making it public.
“I find that the Report is a judicial record, and that the public has a First Amendment right to see the Report,” US District Judge John Gleeson wrote in his opinion late Thursday.
The ruling should send shivers up and down Wall Street, where other big banks have struck deals with the government to keep such reports private.
In June, federal prosecutors said HSBC was “under serious money-laundering and sanctions risk” because it hasn’t tightened up parts of its operations dealing with safeguarding the flow of money.
Since then, the DOJ and New York’s Department of Financial Services have installed monitors at nearly every big Wall Street bank. That could mean that all their reports are essentially available for the public.
The decision is also a victory for Hubert Dean Moore Jr., a 52-year-old chemist from a Philadelphia surburb who had urged Gleeson to release the report.
“I’m struck, frankly,” Moore told The Post. “I’m extremely happy. It’s been a long time. But I think we’re still in the third quarter of the game.”
Moore first requested that Gleeson make the report public on Nov. 3 after the bank sold his mortgage without telling him — a violation of federal laws.
He filed a complaint with the Consumer Financial Protection Bureau, but felt that the bank was stonewalling his claim.
Moore contends that the report, which says that the bank has operational problems in its mortgage operations, could be relevant to his claim with the CFPB.
“It is my contention that the report would (or will) validate my claims that HSBC is in direct violation of multiple sections of multiple Consent Decrees,” he wrote in a letter to Gleeson.
HSBC, which noted that the DOJ and other regulators also opposed the release of the report, said in a statement, “We regret this decision and are considering our next steps.”
Moore said the bank should stop fighting and start apologizing.
“I’m director of business development,” he said. “My job is to deal with people. If you make a mistake, you say sorry. They don’t have that kind of humility at all.”
