HSBC pays record US$1.92b to settle US laundering probe

HSBC pays record US$1.92b to settle US laundering probe

LONDON - Asia-focused bank HSBC said on Tuesday it would pay US authorities a record US$1.92 billion (S$2.3 billion) to settle allegations of money laundering that were said to have helped Mexican drug cartels, terrorists and Iran.

HSBC, which is listed in Hong Kong and London, said in a statement that it would pay the equivalent of 1.48 billion euros or £1.2 billion as part of an agrement with several US authorities including the US Department of Justice.

The London-based bank admitted to having "inadequate" controls in place, accepted responsibility for the group's past mistakes and added that it would finalise a deal soon with Britain's Financial Services Authority watchdog.

The global giant was thrown into crisis earlier this year when a US Senate report found it had allowed affiliates in Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the US without adequate controls.

US lawmakers accused the company of giving Iran, terrorists and drug dealers access to the country's financial system.

"HSBC has reached agreement with US authorities in relation to investigations regarding inadequate compliance with anti-money laundering and sanctions laws," it said in Tuesday's statement.

"This includes a deferred prosecution agreement with the US Department of Justice.

"HSBC has also reached agreement to achieve a global resolution with all other US government agencies that have investigated HSBC's past conduct related to these issues and anticipates finalising an undertaking with the UK FSA shortly."

It added: "Under these agreements, HSBC will make payments totalling US$1.921 billion, continue to cooperate fully with regulatory and law enforcement authorities, and take further action to strengthen its compliance policies and procedures."

In reaction to Tuesday's record fine, HSBC's share price slid 0.25 per cent to 639.60 pence in London morning deals. The group's Hong Kong-listed shares rose 0.31 per cent to end at HK$79.70.

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