Fed ends decade-long enforcement action against HSBC

STORY: The U.S. Federal Reserve said on Thursday, it had ended a decade-long enforcement action against HSBC.

In 2012 the Fed said the bank had violated anti-money laundering rules and sanction laws.

It was accused of allowing itself to be used to launder drug money flowing out of Mexico.

HSBC did not immediately respond to a request for comment.

In a deferred prosecution agreement, the London-headquartered bank acknowledged compliance lapses, including failing to maintain a program against money laundering.

As well as conducting transactions for customers in countries sanctioned by the U.S., including Iran.

HSBC agreed to pay $1.92 billion in fines to U.S. authorities, the largest U.S. penalty against a bank at the time.

It also entered into a five-year deal under which it pledged to strengthen its compliance.

In 2017, after it said it had successfully kept the deal conditions, the Justice Department sought to dismiss the charges deferred by the agreement.

Thursday's announcement by the Fed is not uncommon, as ending enforcement actions usually involve banks paying fines and ensuring they abide by additional requirements laid out by the regulator.

Some of the world's biggest banks have been in a similar situation.

In 2020, Goldman Sachs Group agreed to pay $2.9 billion over its role in a corruption scandal involving Malaysia's 1MDB, after reaching a settlement with the DoJ and other U.S. and overseas regulators.