On Monday, HSBC Holdings announced it had to set aside over $1.1 billion in connection with a money laundering investigation that is ongoing and for a settlement reached over the sale of inappropriate financial products. The bank, based in Britain, could face criminal charges from authorities in the U.S.
The London based bank said it made an additional $800 million provision for the possible settlements, fines and any other expenses that are related to the money laundering inquiry that is taking place. The bank also said it continues to negotiate with authorities from the U.S. A combined amount of $1.5 billion has been earmarked by the bank to cover expenses for the case. Legal costs are not included in the figure.
A report the U.S. government released accused the bank of helping its clients illegally move money linked to illicit activities like drug trafficking to and from banks in the Middle East that had ties to terrorists and into the U.S.
Standard Charter another British bank has already agreed to a settlement of $340 million with banking regulators in New York State after authorities there claimed it had moved billion of U.S. dollars in tainted money and then lied to bank regulators.
Stuart Gulliver the CEO of HSBC said the bank regretted what happened in Mexico and the U.S. and many people in the bank have left and the bank has made attempts to garnish their final compensation.
HSBC said that the final resolution for the inquiry would result in some corporate civil and criminal charges and large fines imposed against the bank. There has been no date stated for when the final settlement with authorities in the U.S. will be announced.