HSBC May Face Criminal Charges

HSBC Holdings said it may face criminal charges in the United States, following a money-laundering investigation. The British bank has earmarked a total of US$1.5 million for possible fines.

Industry analysts are also predicting HSBC may pay the most expensive fine in history.

HSBC is facing investigation for an alleged illegal movement of money. The investigation is led by state and federal authorities in the US and focuses on bank officials who are possibly involved in choking off supplies of US dollars to terrorist organizations and drug cartels.

Regulatory officials and prosecutors said many foreign banks failed to implement strict monitoring and control of cash transactions specifically on their American subsidiaries. Some of these transactions have allowed drug cartels and terrorists groups to transfer ill-gotten money.

The investigation is also looking whether these banking institutions circumvented rules to allow transfer of money that are subject to sanctions.

Just last June, ING Group inked a US$619 million settlement deal with the US Treasury Department because of a similar investigation.

Standard Chartered also paid about US$340 million when a New York investigation probed into the bank’s money-laundering activities involving billions of dollars transferred to Iran for almost 10 years.

HSBC, meanwhile, is also facing criminal charges because of money-laundering activities. If these push through, this would be the first time a bank would face criminal charges.