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By Nate Raymond
NEW YORK, March 10 (Reuters) - A U.S. judge has agreed todelay the release of a report that says HSBC Holdings Plc "moved too slowly" to enhance its anti-money launderingcompliance program following a $1.9 billion pact with the U.S.Justice Department.
U.S. District Judge John Gleeson in Brooklyn, New York, onWednesday stayed the release while prosecutors and London-basedHSBC appeal his January ruling requiring the unsealing of areport by a federal monitor appointed as part of a 2012 deferredprosecution deal.
Gleeson also agreed to redact parts of the January 2015report by former New York prosecutor Michael Cherkasky to, amongother things, minimize risks that criminals would exploitweaknesses in the anti-money laundering and sanctions complianceprograms.
But Gleeson rejected many of HSBC's proposed redactions as"over-inclusive."
Among the findings HSBC wanted redacted, Gleeson said, wasCherkasky's conclusion that the bank "moved too slowly and madetoo little progress toward instilling the type of culture itwill need" to build an effective compliance program.
The order came on Gleeson's last day on the bench beforejoining the law firm Debevoise & Plimpton.
Neither the U.S. Attorney's Office in Brooklyn nor HSBCresponded immediately to requests for comment on Thursday.
Cherkasky, now the executive chairman of compliance companyExiger, was appointed federal monitor as part the five-yeardeferred prosecution agreement with HSBC.
The deal resolved charges that HSBC had become a "preferredfinancial institution" for Mexican drug cartels and other moneylaunderers and conducted transactions for customers in severalcountries subject to U.S. sanctions.
Cherkasky's report was to be kept under wraps.
But Hubert Dean Moore of Pennsylvania, who said he had beenan HSBC mortgage customer before filing for bankruptcy, askedthat it be unsealed so he could review whether the bank stillengaged in "unsafe and unsound business practices."
HSBC and the Justice Department have opposed the report'sunsealing, saying it could provide a "road map" for criminalsplanning to launder money and discourage people from cooperatingwith the monitor.
Both HSBC and the Justice Department have indicated theywill appeal.
The case is U.S. v. HSBC Bank USA NA et al, U.S. DistrictCourt, Eastern District of New York, No. 12-cr-00763. (Reporting by Nate Raymond in New York; Editing by Lisa VonAhn)
