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US, HSBC reach $1.92 billion settlement

HSBC, one of Europe's largest banks, hit with billions in penalties.

Hsbc money laundering 2012 09 21Enlarge
Fake notes were hung out to dry during a protest in front of HSBC in Mexico City on July 30. The bank was fined for failing to apply anti-money laundering rules. (Alfredo Estrella/AFP/Getty Images)

US regulators have reached a $1.92 billion settlement with HSBC, a major European bank the US has accused of money-laundering and other offenses, according to the Wall Street Journal

American lawmakers questioned bank officials in July over reports that they moved billions of dollars at the request of Mexican drug cartels and rebel states like Iran bent on laundering money via the US financial system, according to The New York Times' DealBook.

Early on Tuesday, HSBC announced that it had agreed to the $1.92 billion settlement — the highest penalty figure floated throughout a three-year investigation, said The Times

The British bank last month said it had reserved $1.5 billion for fees related to the investigation, according to BBC.

Though HSBC will avoid indictment by the US, "the bank will admit to violating the Bank Secrecy Act, the Trading with the Enemy Act and other US laws intended to prohibit money laundering" as part of the agreement, wrote the Wall Street Journal, citing information from a government official.

GlobalPost has previously reported on HSBC's business entanglements in Mexico, where the company was accused of helping to launder narco-trafficking money. On a conference call with reporters in July, HSBC’s CEO Stuart Gulliver told reporters, “What happened in Mexico and the US is shameful, it’s embarrassing, it’s very painful for all of us in the firm.”

More from GlobalPost: Drug war ensnares big banks for letting Mexico cartels stash cash

On Monday, HSBC said ex-Treasury Department official Bob Werner will serve as the new Head of Group Financial Crime Compliance and Group Money Laundering Reporting Officer, according to CNN

"The announcement of Bob's new role underscores our determination to address the shortfalls highlighted by recent investigations," HSBC's Rob Sherman told CNN by e-mail today. "We have made good progress to date, but have much more to do."

The HSBC affair has added to Europe's economic woes as the bloc faces major debt problems and disputes over fiscal policy. 

US authorities have pursued similar charges with a total of six international banks since 2009, said The Times, among them Credit Suisse and Barclays.

News of the HSBC settlement came as US officials announced a $327 million settlement with Standard Chartered after the institution confessed to allowing thousands of banking transactions through America on behalf of Iranian and Sudanese clients, reported The Times.

Reuters asks the question, "Is HSBC too big to indict?"

http://www.globalpost.com/dispatch/news/regions/americas/united-states/121210/us-hsbc-announce-19-settlement-report