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HSBC Holdings (HSBC) To Pay $1.9B In Money-Laundering Case

 December 11, 2012 06:47 AM
 


(By Balaseshan) HSBC Holdings Plc (NYSE: HBC) said it has agreed to pay $1.921 billion for the settlements of U.S. investigations into money-laundering lapses.

The investigations includes inadequate compliance with anti-money laundering and sanctions laws. The settlements includes a Deferred Prosecution Agreement (DPA) with the U.S. Department of Justice.

HSBC has also reached agreement to achieve a global resolution with all other U.S. government agencies that have investigated HSBC's past conduct related to these issues and anticipates finalising an undertaking with the United Kingdom Financial Services Authority shortly.

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Under these agreements, HSBC will continue to cooperate fully with regulatory and law enforcement authorities, and take further action to strengthen its compliance policies and procedures. The agreement noted that HSBC Bank USA and HSBC Group have "provided valuable assistance to law enforcement".

"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," said Stuart Gulliver, Group Chief Executive.

In the past several years, the board of HSBC Holdings has taken decisive action to direct management to fix past shortcomings as they have come to light. Since 2011, with new senior leadership teams in place at both HSBC Group and HSBC North America, HSBC has taken extensive and concerted steps to put in place the highest standards for the future.

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The Department of Justice has recognised these efforts in the DPA: "Management has made significant strides in improving 'tone from the top' and ensuring that a culture of compliance permeates the institution. The efforts of management have dramatically improved HSBC Bank USA's and HSBC Group's Bank Secrecy Act / Anti-Money Laundering and Office of Foreign Assets Control compliance programs".

Over the five-year term of the agreement with the Department of Justice, an independent monitor will evaluate HSBC's progress in fully implementing these and other measures it recommends, and will produce regular assessments of the effectiveness of HSBC's compliance function.

"While we welcome the clarity that these agreements bring, ensuring the highest standards wherever we do business is an ongoing process. 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," said Gulliver.

HBC closed Monday's regular session down 0.27% at $51.54. The stock has been trading between $36.67 and $52.14 for the past 52 weeks.

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