HSBC paid $1.9 billion in 2012 to settle money-laundering allegations. U.S. authorities accused the bank of failing to maintain effective anti-money-laundering controls and of allowing transactions involving countries and customers considered high risk.
The settlement covered allegations involving drug-trafficking organizations, sanctioned countries and weaknesses in HSBC’s monitoring systems. Prosecutors said the bank’s U.S. operations had processed billions of dollars in suspicious transactions over several years.
HSBC entered into a deferred prosecution agreement rather than facing an immediate criminal trial. The bank admitted to serious compliance failures, paid the financial penalty and agreed to extensive monitoring and reforms.
The case is sometimes confused with the 2012 sanctions-related settlement involving Standard Chartered. HSBC’s settlement was especially notable for its size and for the U.S. government’s decision not to prosecute the bank criminally at that time.