US Economy
US fines ex-British Empire banks HSBC and Standard Chartered $2.5bn for money laundering
By Finfacts Team
Dec 11, 2012 - 8:08 AM

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Standard Chartered headquarters, Kuala Lumpur.
HSBC and Standard Chartered, the two biggest UK banks by market value, which both have their antecedents in the colonies of the British Empire, are to pay more than $2.5bn in fines as part of record settlements with US authorities over money laundering allegations. The Hongkong and Shanghai Banking Corporation Limited was founded in 1865 in Hong Kong with offices in Shanghai and London and an agency in San Francisco. Standard Chartered Bank, was formed through the merger in 1969 of former British colonial banks - - The Chartered Bank of India, Australia and China, and Standard Bank of British South Africa.

US authorities are expected to announce as early as Tuesday a $1.9bn settlement with HSBC Holdings PLC to settle allegations the bank for years ignored red flags about money laundering and allowed itself to be used by money launderers in Mexico and terrorist financiers in the Middle East.

According to reports, the figure includes nearly $1.3bn in forfeiture as part of a deferred prosecution agreement, which officials said was a record amount for a bank. The settlement would resolve multiple investigations conducted by Justice Department, the Treasury Department and other federal agencies, as well as the Manhattan district attorney.

HSBC confirmed the U.S. settlement, saying it expected reach a similar agreement with UK authorities soon.

Stuart Gulliver, CEO, said: "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."

July 2012: US Senate report says HSBC Bank exposed US financial system to money laundering, drug trafficking, and terrorist financing risks

Feb 2007: Global bank HSBC burnt by slowing US housing market; Percentage of HSBC mortgages more than 60 days past due is climbing - - Finfacts reports on the first news of the US subprime crisis

Standard Chartered agreed on Monday to pay $327m to US regulatory authorities to settle allegations it violated US sanctions law and impeded government inquiries. That sum comes on top of the $340m the UK bank agreed to pay in August to New York state’s Department of Financial Services.

The bank, the fifth-biggest U.K. bank by assets, was accused of illegally scheming over a decade to move some billions of dollars through the US system, money that the regulators say was in breach of embargoes against Iran.

Aug 2012:

Standard Chartered Bank hid $250bn worth of illegal Iranian transactions; Scheme "apparently aided" by Deloitte & Touche

Standard Chartered Bank rejects being cast as a “rogue institution”


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