HSBC may pay US$1.8b to settle case on laundering
Source: Agencies |
December 7, 2012, Friday
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Print Edition
Print Edition
HSBC Holdings Plc might pay a fine of US$1.8 billion as part of a settlement with US law-enforcement agencies over money laundering lapses, according to several sources.
The settlement with Europe's biggest bank - which could be announced as soon as next week - will likely involve HSBC entering into a deferred prosecution agreement with federal prosecutors, said the sources, who spoke on condition of anonymity.
The potential settlement, which has been in the works for months, is emerging as a test case for just how big a signal US prosecutors want to send to try to halt illicit flows of money moving through US banks.
An HSBC spokesman said: "We are cooperating with authorities in ongoing investigations."
HSBC said on November 5 it set aside US$1.5 billion to cover a potential fine for breaching anti-money laundering controls in Mexico and other violations, although Chief Executive Stuart Gulliver said the cost could be "significantly higher."
In regulatory filings, HSBC has said it could face criminal charges. Similar US investigations have culminated in deferred prosecution deals, where law-enforcement agencies delay or forgo prosecuting a company if it admits wrongdoing, pays a fine and agrees to fix its compliance systems. If the company missteps again, the Justice Department could prosecute.
A deferred prosecution agreement could raise questions over whether HSBC is paying a big fine and nothing more, said Jimmy Gurule, a former US Treasury official.
The settlement with Europe's biggest bank - which could be announced as soon as next week - will likely involve HSBC entering into a deferred prosecution agreement with federal prosecutors, said the sources, who spoke on condition of anonymity.
The potential settlement, which has been in the works for months, is emerging as a test case for just how big a signal US prosecutors want to send to try to halt illicit flows of money moving through US banks.
An HSBC spokesman said: "We are cooperating with authorities in ongoing investigations."
HSBC said on November 5 it set aside US$1.5 billion to cover a potential fine for breaching anti-money laundering controls in Mexico and other violations, although Chief Executive Stuart Gulliver said the cost could be "significantly higher."
In regulatory filings, HSBC has said it could face criminal charges. Similar US investigations have culminated in deferred prosecution deals, where law-enforcement agencies delay or forgo prosecuting a company if it admits wrongdoing, pays a fine and agrees to fix its compliance systems. If the company missteps again, the Justice Department could prosecute.
A deferred prosecution agreement could raise questions over whether HSBC is paying a big fine and nothing more, said Jimmy Gurule, a former US Treasury official.
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