HSBC Pays Big to Settle Probe




HSBC, the largest bank in Europe, agreed Tuesday to pay $1.9 billion to resolve a U.S. money-laundering investigation. The bank is facing charges that it “transferred funds through the U.S. from Mexican drug cartels and on behalf of nations such as Iran that are under international sanctions,” the Washington Post reports.

“We accept responsibility for our past mistakes,” said HSBC Chief Executive Stuart Gulliver. “We have said we are profoundly sorry for them, and we do so again.” […]

HSBC conceded that its anti-money laundering measures were inadequate and that it has taken big steps in beefing up its controls. Among other measures, it has hired a former Treasury undersecretary for terrorism and financial intelligence as its chief legal officer.

The bank also said it has reached agreements over investigations by other U.S. government agencies and expects to sign an agreement with British regulators shortly.

In return for being spared U.S. prosecution, HSBC said it would continue to strengthen its compliance policies and procedures. Its performance will be evaluated by an independent monitor over the 5-year term of the agreement with the Department of Justice, which has used such arrangements in cases involving large corporations, notably in settlements of foreign bribery charges.

The bank will pay $1.25 billion in forfeitures and $655 million in civil penalties, making this the largest case involving a bank.

HSBC supported President Barack Obama, donating more than $75,000 during the 2008 and 2012 campaigns.