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UK banks fined record sums for money laundering

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11/12/2012
HSBC and Standard Chartered have agreed record settlements over money laundering allegations as the former agrees to pay $1.9bn to US regulators.

HSBC, which had been alleged to have helped launder money belonging to drug cartels and countries under US sanctions, will pay a total of $1.92bn to settle US investigations and anticipates making a separate settlement with the Financial Services Authority (FSA) “shortly”.

The UK-listed bank came under fire in a US Senate report in July, and subsequently set aside $1.5bn in reserves to cover any agreement with US regulators.

UK peer Standard Chartered has also confirmed it has reached a final settlement with the US Office of Foreign Assets Control regarding accusations it breached US sanctions with Iran.

The bank will pay $327m in the second half of 2012 to settle the issue, on top of the $340m it agreed to pay in August to the New York Department of Financial Services.

HSBC, meanwhile, has also entered into a Deferred Prosecution Agreement with the US Department of Justice, which will see an independent monitor evaluate HSBC’s progress in improving its internal structure, controls and procedures over the next five years.

“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 organisation from the one that made those mistakes,” said group chief executive Stuart Gulliver.

The two banks’ respective settlements represent the two largest penalties ever paid to US authorities by financial institutions for breaching sanctions.

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