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HSBC Agrees To Pay $1.92 Bln In Money-laundering Probes


British financial services firm HSBC Holdings Plc (HBC,HSBA.L) Tuesday said it agreed with the United States authorities to pay $1.921 billion related to its investigations regarding inadequate compliance with anti-money laundering and sanctions laws. The bank also anticipates finalizing an undertaking with the UK Financial Services Authority, shortly.

Stuart Gulliver, chief executive of HSBC Group stated, "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 organization from the one that made those mistakes."

HSBC, Europe's biggest bank by market value, noted that its settlement includes a Deferred Prosecution Agreement with the US Department of Justice. HSBC has also agreed to reach a global resolution with all other US government agencies that have investigated these issues.

The probe was reportedly conducted by the Justice Department, Treasury and other federal agencies, as well as the Manhattan district attorney. The settlement with multiple agencies in the U.S. is said to include a civil fine of $650 million and about $1.3 billion in forfeiture. HSBC is primarily charged of bulk-cash, U.S. dollar transactions between HSBC's Mexico and U.S. Units.

Further, the bank said that over the five-year term of the agreement with the Department of Justice, an independent monitor will evaluate HSBC's progress in fully implementing the measures it has recommended.

The bank has assured its continued cooperation with regulatory and law enforcement authorities, and said it will take further action to strengthen its compliance policies and procedures.

"Since 2011, with new senior leadership teams in place at both HSBC Group and HSBC North America, HSBC has taken extensive and concerted steps to put in place the highest standards for the future," Gulliver said.

HSBC noted that over the past several years, HSBC Bank USA has undertaken various voluntary remedial measures and has spent over $290 million on such measures.

Last month, the bank had revealed in a regulatory filing that it has set aside an amount of $1.5 billion following a Senate Committee's finding that it had given access to Iran, terrorists and drug cartels to the U.S. financial system.

Since the beginning of 2009, these regulators and agencies have slapped penalties on six foreign banks, including Standard Chartered PLC (STAN.L), ING Bank, Credit Suisse (CS) and Barclays Plc (BCS), for processing thousands of transactions for Iranian, Burmese, Libyan and Sudanese clients through their subsidiaries in the U.S.

On Monday, U.S. regulatory authorities have levied a fine of $327 million on HSBC rival Standard Chartered for transactions with Iranian clients that may have violated U.S. Sanctions.

HBC closed Monday's regular trading session at $51.54, down $0.14 or 0.27 percent on a volume of 1.12 million shares.

HSBA.L closed on the London Stock Exchange at 641.20 pence, down 2.40 pence or 0.37 percent on a volume of 14.84 million shares.

by RTTNews Staff Writer

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