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HSBC to pay USD 1.92 bn for settling US probe

Press Trust of India  |  London 

The settlement announced by HSBC brings an end to probe initiated by US authorities following US Senate allegations that the London-headquartered bank had exposed the American financial system to various terror-financing, money laundering and drug trafficking activities.

Admitting responsibility for "past mistakes", HSBC said it has reached an agreement with US authorities in relation to investigations into inadequate compliance with anti-money laundering and sanctions laws.

A Deferred Prosecution Agreement (DPA) also has been reached with the US Department of Justice, among others.

"Under these agreements, HSBC will make payments totalling USD 1.921 billion, continue to cooperate fully with regulatory and law enforcement authorities...," the bank said in a statement.

As per the US Senate report in July, HSBC indulged in transactions worth billions of dollars -- that exposed US financial system to risks -- mainly due to poor risk control systems at the bank.

HSBC has also reached agreement to achieve a global resolution with all other US government agencies that have investigated its past conduct related to these issues.

The banking entity said it expects to finalise an undertaking with the UK Financial Services Authority shortly.

"We accept responsibility for our past mistakes.

We have said we are profoundly sorry for them, and we do so again," HSBC Group Chief Executive Stuart Gulliver said.

The announcement comes a day after US Treasury said StanChart would pay USD 132 million to settle alleged violations of sanctions laws, including those relating to Iran, Burma, Libya and Sudan. The amount is part of USD 327 million settlement with US authorities.

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First Published: Tue, December 11 2012. 16:05 IST