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HSBC money laundering prosecution expires

HSBC has drawn a line under scandal that saw it fined $1.9bn (£1.4bn) in the US five years ago for failing to prevent Mexican drug cartels from laundering hundreds of millions of dollars.

The bank said the deferred prosecution agreement (DPA) entered into with the Department of Justice (DoJ) had expired – lifting the threat of further penalties.

Shares in HSBC, which is Europe’s biggest bank, rose 2.5%.
Under the DPA deal, the lender had pledged to strengthen its sanctions and money-laundering controls.
HSBC said it had “lived up to all its commitments” and the DoJ would therefore file a court motion to dismiss the charges that had been deferred under the agreement.
Chief executive Stuart Gulliver, who is due to retire in February after leading the business since 2011, said: “HSBC is able to combat financial crime much more effectively today as the result of the significant reforms we have implemented over the last five years.
“We are committed to doing our part to protect the integrity of the global financial system, and further improvements… will remain a top priority for the bank into 2018 and beyond.”

HSBC chief legal officer Stuart Levey said: “While we still have improvements to make and work to do, this shows the DPA has worked in the way intended.”
Documents in the case against the bank in 2012 stated that lax money laundering controls at HSBC allowed two cartels – one each in Mexico and Colombia – to move $881m in drug proceeds through the bank over the second half of the last decade.
After the DPA was signed in 2012, HSBC embarked on a worldwide programme of upgrading its compliance systems to US standards, raising its spending to more than $1bn a year.

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As part of the agreements with the DoJ and the UK’s Financial Conduct Authority, it also installed an independent monitor to produce annual reports in the progress of its reforms on fighting financial crime.
The bank said on Monday that the monitor, former US district attorney and financial crime expert Michael Cherkasky, would “continue in that capacity for a period of time at the FCA’s discretion”.

Source: Sky

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My name is Joel Bissitt. I have been an entrepreneur for 24 years and have run many small businesses across various sectors. For the last 10 years I have worked mainly within online media, franchising and small business start-ups.

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