(Updates to reflect the fact that Midzain has issued a comment.)
By Carrick Mollenkamp
NEW YORK, May 3 (Reuters) - Since 2007, as HSBC Holdings Plc's U.S. business has faced multiple investigations for alleged failures in its anti-money laundering (AML) efforts, at least half a dozen executives involved in them have cycled through the bank.
Titles and jobs have overlapped, and HSBC typically doesn't announce such job changes, disclosing most in securities filings. Those filings and interviews with former employees show that high turnover in compliance continued into March this year.
In 2007, Teresa Pesce, a former U.S. prosecutor hired in 2003 to bolster AML compliance, left the bank.
A subsequent compliance boss, Lesley Midzain, was deemed incompetent in 2009 by the Office of the Comptroller of the Currency. According to an HSBC regulatory filing in 2010, Midzain was "no longer a policy making officer of HSBC USA." A Midzain spokesman said she is an "experienced compliance professional."
Carolyn Wind, a former OCC bank examiner and compliance executive with Republic Bank, subsequently acquired by HSBC, served as a senior compliance executive with HSBC USA until leaving in 2008, according to a regulatory filing.
Wyndham Clark, a former Treasury Department official, joined the bank as an AML senior executive in 2009 and left the next year, according to his LinkedIn account.
In 2010 Senate subcommittee hearings on how illicit funds flow through U.S. banks, Wiecher Mandemaker testified on behalf of HSBC as a director of general compliance in the personal financial services division of HSBC Bank USA. Alluding to HSBC's ad slogan, Mandemaker told the panel: "We are also the 'World's Local Bank,' located in far more countries around the globe than most other institutions, and as such, we realize that we have unique opportunities and challenges in the fight against improper banking practices."
Mandemaker has since gone to work for HSBC in the Middle East.
In January 2011, HSBC hired Eric Larson from British bank Standard Chartered Plc as chief compliance officer of the U.S. subsidiary. In March this year, Larson left. HSBC replaced him with Gary Peterson. These changes were reported in regulatory filings.
In January, Stuart Levey, widely considered one of the top experts on terrorism finance, was named chief legal officer for HSBC, working out of group headquarters in London. As the first U.S. under secretary for terrorism and financial intelligence at the Treasury Department, Levey led government efforts to use economic sanctions to thwart rogue states such as Iran and North Korea.
Most of these current and former compliance executives couldn't be reached for comment. Those who were reached declined to comment, apart from Peterson and Midzain.
The frequent changes in senior compliance personnel reflect HSBC's efforts to beef up AML compliance, the bank says. "The process of expanding and strengthening the AML organization inherently results in changes to the team," said HSBC spokesman Robert Sherman.
(Editing by John Blanton and Prudence Crowther)
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