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HSBC to cut and move 77 jobs Shifts unit that fights money laundering

HSBC Bank USA is laying off 77 employees in its money-laundering prevention unit in Buffalo this fall and moving the jobs to New York City and Delaware, as the British-owned bank faces intense scrutiny and heavy criticism in Washington over alleged violations of federal laws.

The U.S. subsidiary of London-based HSBC Holdings PLC disclosed the cuts in a Worker Adjustment and Retraining Notification (WARN) filing with the state Department of Labor.

The bank indicated that it would be closing the Anti-Money Laundering Compliance Unit in Buffalo, with the job cuts to occur between Sept. 18 and Oct. 18.

Spokesman Robert A. Sherman said HSBC is shifting the entire anti-money laundering function in Buffalo to New York City and New Castle, Del., where the bank has been expanding its existing teams there. The goal is to consolidate the operation to make it more effective.

"This is part of a broader effort to restructure the AML monitoring function by centralizing it and concentrating expertise in those two locations," Sherman said.

Affected employees will be given at least 90 days' working notice, plus severance and outplacement assistance. They will also have the opportunity to keep their jobs and relocate to New York City or Delaware, Sherman said.

"We greatly appreciate the dedication of these employees and they will have priority eligibility for other jobs at HSBC," Sherman said, including in Buffalo. "We are hiring in Buffalo. We continue to hire in Buffalo."

HSBC has been bulking up its compliance division in response to federal investigations and accusations that the global bank -- which operates in 82 countries around the world -- has been violating U.S. money-laundering rules, particularly provisions of the Bank Secrecy Act, as well as bans on U.S. banks doing business with certain countries or certain foreign individuals.

The laws are designed to prevent the U.S. financial system from being used to support criminal activities, including but not exclusively terrorism. They're also aimed at punishing certain foreign leaders or governments that have been identified as threats or violators of international law.

Many large banks have been cited for such violations, but HSBC has been a particular target of criticism for the past decade. It's been the subject of both congressional and regulatory probes and reports, as well as media scrutiny. And it's acknowledged in filings with the Securities and Exchange Commission that it may face not only fines but criminal charges or sanctions.

In response, the bank has increased its Anti-Money Laundering Monitoring group from just 75 people in 2010 to 250 currently. And by concentrating them in two places, officials believe they can be more effective.

Sherman said the bank has also taken steps to implement "rigorous new controls and monitoring systems" as part of its commitment to regulators to do better. And officials are pursuing "continuing close partnership with U.S. regulators and law enforcement," he added.

"We have acknowledged that we've fallen short of our own expectations, and we're accountable for that, and we're continuing to work with regulators to cooperate in the investigations," Sherman said. "This isn't about any one individual. HSBC is accountable."

Disclosure of the layoffs also comes just days after HSBC completed the $900 million sale of its upstate New York branches to First Niagara Financial Group, marking its exit from the retail and small-business banking market in the region.

That's largely separate, however, from the anti-money laundering and compliance functions, which also involve other parts of the bank that still operate here, including commercial, corporate, investment and private banking.