HSBC nears $1.8-bn deal to settle money-laundering charges
11 December 2012
HSBC Holdings Plc has neared a deal to pay around $1.8 billion to settle a money-laundering probe by US law enforcement agencies, becoming the fourth British bank this year to settle money-laundering charges, according to several media reports.
The $1.8-billion fine would be one of biggest ever imposed on a UK bank, adding to the shame caused by a spate of controversies that has gravely sullied the image of Britain's banking sector.
The settlement by Europe's biggest bank with US prosecutors is likely to come in the form of a deferred prosecution agreement, which would allow the London-based bank to avoid a formal indictment.
Deferred prosecutions have become an increasingly popular way for federal prosecutors to penalise companies without running the risk of forcing them out of business by indicting them.
A two-year long investigation carried out by the by the US Department of Justice (DoJ), the US Federal Reserve and the Office of the Comptroller of the Currency, found that HSBC's Mexican affiliate transported $7 billion in dollar notes of Mexican drug cartels to HSBC-US between 2007 and 2008.
The amount that far exceeded such fund transfers by any other Mexican banks even twice its size, raised concerns that the volume of dollars included proceeds from illegal drug sales in the US.