HSBC and Standard Chartered to pay US over $2bn in charges

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Published time: December 11, 2012 11:00
Edited time: December 11, 2012 20:48

HSBC and Standard Chartered Bank headquarters. (Reuters / Bobby Yip)

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Banking, Global economy, UK, USA

British banking giants have come under fire line from the US financial authorities. HSBC will pay a record $1.9bn to settle a money-laundering probe, with Standard Chartered getting a $327mn charge for violating US sanctions against Iran.

The fine against HSBC will include $1.25bn in forfeiture, as well as $655mn in civil penalties. In an attempt to cut costs and improve profitability, HSBC CEO Stuart Gulliver made the bank the matter for US probes and claims from UK clients. The lack of money-laundering controls at HSBC allowed terrorists and drug cartels access to the US financial system, according to Bloomberg.

The bank accepts responsibility for “past mistakes” and is “profoundly sorry for them,” Gulliver said.

On Tuesday the Justice Department stated that HSBC intentionally allowed prohibited transactions with Iran, Libya, Sudan and Burma, that date between 2001 and 2006.

The federal government also accused the bank of facilitating transactions with Cuba, which was in violation of the Trading With the Enemy Act.

Another large British bank Standard Chartered – the second largest by market value – agreed on Monday to pay a total of $327mn in fines, as the regulators accused it of violating US sanctions against Iran and Sudan.

“When banks dodge US sanctions laws, they imperil our financial system and our national security,” Bloomberg quotes Washington US Attorney Ronald Machen.

“Today’s [Monday] agreement holds Standard Chartered Bank accountable for intentionally manipulating transactions to remove references to Iran, Sudan, and other sanctioned entities, and then further concealing these transactions through misrepresentations to US regulators.”

Among other concerns for the US state prosecutors have been an investigation over alleged Libor interest rate manipulating, where HSBC is also among the accused. Libor is a key bank lending rate which affects different financial instruments and transactions worth more than $300trl worldwide.

Comments (5)

sys (unregistered) 11.12.2012 20:05

The amount of money being laundered with some banks earning 30 percent to launder drug monies amonth other things is what has transformed banks into major arms of organized crime, with once families operating like conglomerates, and corupted governments, and routinely affecting the markets.globally This is a slap on wrist compared to the billions , if not trillions that have been funneled between them. These are like small fish..The cost gets passed on to the consumer and shareholders. Very tragic situation for all of us.

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Daniel Fry 11.12.2012 17:45

So the banks engaged in criminal activity. Why isn't anyone going to jail?

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Sergey (unregistered) 11.12.2012 17:34

duncan lucas-registered wrote in #1
Who the -ell gave the US the right to impose charges against foreign countries?? If I sent to Iran for a tea-shirt saying "Iran will not be defeated by the US"=Will "sanctions" and fines be imposed against me??? The US should never be allowed to "rule the World"
It 's a British bank and European Union and England agreed to the sunctions, in fact they promoted them as their own. So the bank is screwed. However I do not understand why they have to pay U.S. alone, it should be a penalty distrubuted among all the parties who have sunctioned Iran.

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