HSBC has agreed to pay a record US$1.92 billion fine to settle a multi-year probe by US prosecutors, who accused Europe's biggest bank of failing to enforce rules meant to prevent the laundering of criminal cash.
HSBC Holdings Plc admitted to a breakdown of controls and apologized in a statement yesterday announcing it had reached a deferred-prosecution agreement with the US Department of Justice.
"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes," said CEO Stuart Gulliver.
"Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters."
The US Senate panel alleged that HSBC failed to maintain controls designed to prevent money laundering by drug cartels, terrorists and tax cheats, when acting as a financier to clients routing funds from places including Mexico, Iran and Syria.
The bank was unable to properly monitor US$15 billion in bulk cash transactions between mid-2006 and mid-2009, and had inadequate staffing and high turnover in its compliance units, the panel said.
HSBC yesterday said it expected to also reach a settlement with British watchdog the Financial Services Authority. The FSA declined to comment.
US and European banks have now agreed to settlements with US regulators totaling some US$5 billion in recent years on charges they violated US sanctions and failed to police potentially illicit transactions.
No bank or bank executives, however, have been indicted, as prosecutors have instead used deferred prosecutions - under which criminal charges against a firm are set aside if it agrees to conditions such as paying fines and changing behavior.
HSBC's settlement also includes agreements or consent orders with the Manhattan district attorney, the Federal Reserve and three US Treasury Department units: the Office of Foreign Assets Control, the Comptroller of the Currency and the Financial Crimes Enforcement Network.
HSBC said it would pay the fine, continue to cooperate fully with regulatory and law enforcement authorities and take further action to strengthen its compliance policies and procedures. US prosecutors have agreed to defer or forego prosecution.
The fine is the third time in a decade that HSBC has been penalized for lax controls.
Source: http://www.shanghaidaily.com/gallery/photo.asp?article_id=518864 |
