HSBC Slapped With $1.9 Billion Fine

HSBC has agreed to pay a record $1.92 billion fine to settle a multi-year probe by US prosecutors, who accused Europe’s biggest bank of failing to enforce rules designed to prevent the laundering of criminal cash.

The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.

After months of discussions, US prosecutors decided against a criminal indictment, but only after securing record penalties and wide-ranging sanctions. A money-laundering indictment, or a guilty plea over such charges, would have been a death sentence for the bank. Such actions could cut off the bank from certain investors like pension funds and ultimately cost it its charter to operate in the United States.

“We accept responsibility for our past mistakes,” HSBC’s chief executive, Stuart Gulliver, said in the statement. “We are committed to protecting the integrity of the global financial system. To this end, we will continue to work closely with governments and regulators around the world.”

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