WASHINGTON — HSBC has agreed to pay a record $1.92 billion fine to settle a multi-year probe by US prosecutors, who accused Europe’s biggest bank of failing to enforce rules designed to prevent the laundering of criminal cash.
HSBC Holdings Plc admitted to a breakdown of controls and apologised in a statement today announcing it had reached a deferred-prosecution agreement with the US Department of Justice, as first reported by Reuters last week.
“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 Chief Executive 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 deferred prosecution agreement, when detailed by US Justice Department officials, could yield new information about a failure at HSBC to police transactions linked to Mexico, sources familiar with the matter said.
Details of those dealings were reported this summer in a sweeping US Senate probe.
The 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 $15 billion in bulk cash transactions between mid-2006 and mid-2009, and had inadequate staffing and high turnover in its compliance units, July’s report said.
HSBC today said it expected to also reach a settlement with British watchdog the Financial Services Authority. The FSA declined to comment. (Reuters)