HSBC to pay US$1.9 billion money laundering fine

Payment to settle probe by U.S. federal and state authorities.

The probe of HSBC, Europe’s largest bank, has focused on the transfer of funds through the U.S. financial system from Mexican drug cartels and on behalf of nations like Iran that are under international sanctions.

The U.S. investigation will result in HSBC paying US$1.25 billion in forfeiture and US$655 million in civil penalties. The $1.25 billion figure is the largest forfeiture ever in a case involving a bank.

HSBC Group Chief Executive Stuart Gulliver said the bank accepts responsibility for its past mistakes.

“We have said we are profoundly sorry for them, and we do so again.”

Under what is known as a deferred prosecution agreement, HSBC will be accused of violating the Bank Secrecy Act and the Trading with the Enemy Act.

In exchange for admitting certain misconduct, HSBC won't be prosecuted further if it meets certain conditions such as strengthening its internal controls to prevent money laundering.

The U.S. Justice Department has often used this arrangement in cases involving large corporations, notably in settlement of foreign bribery charges.