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HSBC to pay $1.92 billion in US money laundering case

Text by FRANCE 24

Latest update : 2012-12-11

HSBC said Tuesday that it had agreed to pay US authorities a record $1.92 billion to settle allegations of money laundering as part of a deal that would ensure the bank will not prosecuted provided it strengthens internal controls.

Banking giant HSBC said Tuesday that it had agreed to pay US authorities a record $1.92 billion to settle US money laundering accusations.

The investigation into Europe’s largest bank had focused on the transfer of billions of dollars on behalf of nations such as Iran and the transfer of money from Mexican drug cartels.

A US law enforcement official said Monday that HSBC would pay $1.25 billion in forfeiture and pay $655 million in civil penalties. The $1.25 billion figure is the largest forfeiture ever in a case involving a bank.

Under what is known as a deferred prosecution agreement, the financial institution will be accused of violating the Bank Secrecy Act and the Trading With the Enemy Act but will not be prosecuted further if it meets certain conditions, such as strengthening its internal controls to prevent money laundering.

"HSBC has reached agreement with United States authorities in relation to investigations regarding inadequate compliance with anti-money laundering and sanctions laws," the Hong Kong-listed lender said in a statement.

"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again," group chief executive Stuart Gulliver said in the statement.

"The HSBC of today is a fundamentally different organisation from the one that made those mistakes," he added.

"We are committed to protecting the integrity of the global financial system. To this end, we will continue to work closely with governments and regulators around the world."

The bank said it has also reached agreements in connection with investigations by other US government agencies. It expects to sign an agreement with British regulators shortly.

US lawmakers accused the global bank in July of giving Iran, terrorists and drug dealers access to the US financial system. The firm soon afterwards apologised for failing to apply anti-money laundering rules and a senior executive resigned.

David Bagley, the head of group compliance for HSBC in London, was forced to step down from his post in the wake of a US Senate subcommittee's damning report on the bank's operations.

In early November, HSBC said it had set aside $1.5 billion for fines linked to money laundering allegations in the United States.

(FRANCE 24 with wires)

Date created : 2012-12-11

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