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HSBC To Pay Record $1.9B Fine

December 11, 2012 by  

HSBC To Pay Record $1.9B Fine, The penalty is the largest ever paid by a bank and follows a multiyear U.S. criminal investigation. HSBC Holdings Plc has agreed to pay $1.92 billion to settle a multiyear U.S. criminal probe into money-laundering lapses at the British lender, the largest penalty ever paid by a bank.

HSBC admitted to a breakdown of controls and apologized in a statement Tuesday announcing it had reached a deferred-prosecution agreement with the U.S. Department of Justice, as was first reported by Reuters last week.

“We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes,” said Chief Executive Stuart Gulliver.

“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.”

The bank said it expected to also reach a settlement with British watchdog the Financial Services Authority.

U.S. and European banks have now agreed to settlements with U.S. regulators totaling some $5 billion in recent years on charges they violated U.S. sanctions and failed to police illicit transactions.

No bank or bank executives, however, have been indicted as prosecutors have instead utilized deferred prosecutions.

The deferred prosecution agreement, when detailed by U.S. Justice Department officials later Tuesday, could yield new information about a failure at HSBC to police transactions linked to Mexico, sources familiar with the matter said. Details of those dealings were reported this summer in a sweeping U.S. Senate probe.

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