HSBC is hoped to admit on Tuesday it has settled crimination of running money for Mexican drug barons for a larger than expected $1.9bn (£1.2bn), just 24 hours after close rival Standard Chartered admitted paying $670m (£415m) in penalties to US regulators to settle allegations it broke agreements on Iran.
HSBC is expected to ensure it has struck the contract which has already led to the departure of consent head David Bagley and put pressure on former chairman Lord Green, now a trade minister. The bank is expected to admit violating US laws meant to forbid money laundering including the Bank Secrecy Act and the Trading with the Enemy Act. The deal is expected to include a settlement with the powerful Manhattan district attorney's office and a deferred prosecution agreement with both the Justice department and Treasury department.
Peter Henning, a professor of law at Wayne State University, said: "If the numbers are right, this is going to get everybody's attention. The worst situation would be if the charges were for money laundering but it looks like this is a deferred prosecution relating to books and record controls, that gives the bank some wiggle room in terms of its explanations. But the size of the fine means the bottom line is this is very significant." Henning said the fine would have a important "reputational impact" and HSBC would have to be very attentive in future. "You get one black mark. If something like this comes up again in the US, the authorities are not going to be very forgiving." European banks seemed to have under estimated the prosecutorial zeal of the US authorities, he said. "We have had Standard Chartered and now this and we still have more Libor cases to come." The fines on Standard Chartered follow imputation that lax systems left the US financial system vincible to "drug kingpins" and terrorists. Standard Chartered is paying $327m to the US Federal Reserve, the US justice department and the New York district attorney, it was announced yesterday, following a settlement of $340m in August with the New York department of financial services.
The bruising episode for Standard Chartered, which until the summer was regarded to have preserved its reputation through the banking crisis, also includes the bank being forced set up "acceptable" compliance programmes. Cyrus Vance, the Manhattan district attorney, said: "Banks occupy positions of trust. It is a bedrock principle that they must deal honestly with their regulators. published by "The Guardian"
HSBC is expected to ensure it has struck the contract which has already led to the departure of consent head David Bagley and put pressure on former chairman Lord Green, now a trade minister. The bank is expected to admit violating US laws meant to forbid money laundering including the Bank Secrecy Act and the Trading with the Enemy Act. The deal is expected to include a settlement with the powerful Manhattan district attorney's office and a deferred prosecution agreement with both the Justice department and Treasury department.
Peter Henning, a professor of law at Wayne State University, said: "If the numbers are right, this is going to get everybody's attention. The worst situation would be if the charges were for money laundering but it looks like this is a deferred prosecution relating to books and record controls, that gives the bank some wiggle room in terms of its explanations. But the size of the fine means the bottom line is this is very significant." Henning said the fine would have a important "reputational impact" and HSBC would have to be very attentive in future. "You get one black mark. If something like this comes up again in the US, the authorities are not going to be very forgiving." European banks seemed to have under estimated the prosecutorial zeal of the US authorities, he said. "We have had Standard Chartered and now this and we still have more Libor cases to come." The fines on Standard Chartered follow imputation that lax systems left the US financial system vincible to "drug kingpins" and terrorists. Standard Chartered is paying $327m to the US Federal Reserve, the US justice department and the New York district attorney, it was announced yesterday, following a settlement of $340m in August with the New York department of financial services.
The bruising episode for Standard Chartered, which until the summer was regarded to have preserved its reputation through the banking crisis, also includes the bank being forced set up "acceptable" compliance programmes. Cyrus Vance, the Manhattan district attorney, said: "Banks occupy positions of trust. It is a bedrock principle that they must deal honestly with their regulators. published by "The Guardian"
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