A US federal judge has ordered a report by Michael Cherkasky, the corporate compliance monitor appointed on the same day that the US Government produced HSBC's deferred prosecution agreement, to be made public.

US authorities fined the HSBC group $1.9 billion in December 2012 for its systematic ten-year money-laundering spree, ordered the banking empire to undertake internal reforms (which, hopefully, will be more successful than those to which it agreed in two previous cease-and-desist agreements) and called for an external monitor who has written a report on progress so far. The US Government has been trying to keep the resulting report secret, claiming at one stage that its release would allow criminals to know the secrets of money-laundering, at another that it would make it harder for the external consultants to do their jobs. HSBC has been backing these arguments most heartily.

This has irritated Judge John Gleeson, who believes that the public has the right to see the reports that monitors make in such circumstances. The Government published its NPA with HSBC in December 2012 but Gleeson gave it legal effect the following summer by signing an order. When the Government declined to make the report public, Gleeson had to exert his prerogative and rule that it counted as a 'judicial record' and was therefore subject to public scrutiny. At a hearing in the middle of last month, he reportedly said to the prosecutors and representatives of HSBC: “You put me in this position, I can’t for the life of me figure out why the sun shouldn’t shine [on the report].”

His novel exercise of supervisory control over the progress of the DPA in the aftermath of the sign-off was accompanied by his misgivings about the controversial settlement. In the pages of that very settlement he wrote: he contracting parties have chosen to implicate the Court in their resolution of this matter. "There is nothing wrong with that, but a pending federal criminal case is not window-dressing. By placing a criminal matter on the docket of a federal court, the parties have subjected their DPA to the legitimate exercise of that court’s authority."

The agreement lasts for five years dating from the summer of 2013 and, as the judge noted in the order, it requires a corporate compliance monitor to supervise HSBC’s remedial measures, as well as evaluate HSBC’s ongoing compliance with the Bank Secrecy Act 1970, the International Emergency Economic Powers Act 1977 and the Trading With The Enemy Act 1917, during the pendency of the agreement. This presumably is what classifies it as a judicial record.

The report has not yet been released. By the only account the public has, it describes a bank that is still reluctant to make the necessary reforms. Bloomberg's news service claims that insiders have painted a picture of bullying, obfuscation and whispering campaigns against 'internal watchdogs.'

In the order of 2013, the judge mentioned the ugly mood of the public towards HSBC, referring to an article by Matt Taibbi of Rolling Stone entitled "Gangster Bankers: Too Big to Jail" and to the many letters he had received from people from all walks of life. The by-product of the forthcoming publicisation of the 1,000-page report ought to be a mine of information for compliance officers at other banks.