HSBC (NYSE:HBC) isn’t the first or last bank to pay settlement fines over charges of non-compliance with U.S. mandates for banks to make sure they aren’t unwittingly or otherwise aiding criminals laundering money. HSBC will pay $1.92 billion — the latest and priciest of many such settlements — for its failure to maintain controls to prevent laundering.
Banks are expected to maintain controls that help identify suspicious deposits that may be laundered money from drug cartels, terrorists, and tax cheats, particularly when the money is being wired from other countries like Mexico, Syria, or Iran. HSBC has been found weak on its controls previously, both in 2003 and 2010, with some $15 billion of poorly monitored transactions going through between 2006 and 2009 alone.
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HSBC says it is determined to turn things around and has increased funding for anti-laundering systems, also hiring a former U.S. Treasury Department official to be the new chief legal officer. For the next 5 years, an independent monitor will gauge HSBC’s compliance to ensure the bank is improving and preventing laundering.
Though not faced with as large of fines, many other banks have been faced with similar charges of lax controls that allowed money laundering. Some of those banks include JPMorgan Chase (NYSE:JPM), Wachovia Corp. (NYSE:WFC), Citigroup Inc. (NYSE:C), Credit Suisse Group (NYSE:CS), Lloyds Banking Group (NYSE:LYG), Barclays (NYSE:BCS), ABN Amro Holding NV.
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