Failure to put in place appropriate
money-laundering prevention measures could cost HSBC up to $1bn,
according to press reports.
HSBC is accused of facilitated financing of
terrorism and other criminal activities by lacking effective
internal controls between 2004 and 2010.
The UK-based bank refused to comment on the
possible involvement of its private banking division in the
According to analysts’ speculations, US
regulators could impose a higher fine on HSBC than the $619m ING
agreed to pay in January 2012, following the accusation it broke US
sanction laws by helping Cuban and Iranian companies to move
capital through the American banking system.
HSBC seeks US senate
HSBC executives are to appear before the US
Senate’s investigative panel on July 17.
The meeting is likely to feature the testimony
of Irene Doner, HSBC’s North America chief executive.
A leaked internal memo to staff suggests the
bank is going to apologise to US lawmakers for its wrongdoings in
order to reach a settlement.
In the memo, HSBC CEO Stuart Gulliver said:
“Between 2004 and 2010, our anti-money laundering controls should
have been stronger and more effective, and we failed to spot and
deal with unacceptable behavior. [It is] right that we be held
accountable and that we take responsibility for fixing what went
Compliance spend increased to
Reports suggest HSBC will have to show the US
senate the improvement made to its compliance control systems.
According to the internal memo, since 2010 the
bank has doubled its efforts to assure legal compliance, bringing
the amount spent to $400m, up from $200m.
“The Board and leadership of HSBC are fully
committed to implementing the highest standards and have already
made significant changes to our organisation’s structure to bring
this about” an HSBC spokesman told PBI.