NEW YORK—HSBC Plc, the U.K.’s biggest bank, is reportedly bracing for a $1 billion fine from U.S. regulators for alleged money-laundering offenses.
HSBC becomes the latest banking giant to succumb to bad publicity, joining rival British bank Barclays Plc, which is mired in a Libor-fixing scandal that cost the firm $450 million in a settlement with U.K. and U.S. regulators, as well as its CEO and chairman.
The news was unveiled when an internal memo was leaked to the press Wednesday, detailing the company’s plans to move forward.
“Between 2004 and 2010, our anti-money-laundering controls should have been stronger and more effective and we failed to spot and deal with unacceptable behavior,” Stuart Gulliver, HSBC’s CEO, said in a memo obtained by the Wall Street Journal. According to the memo, Gulliver will appear in an upcoming U.S. Senate hearing to apologize and answer questions.
The fine relates to transactions that occurred between 2004 and 2010, which regulators believed funded terrorists or other shadowy organizations, and were not caught by the bank’s internal controls governing sanctions.
The HSBC memo stated that while there are few details, “in the past we fell well short of the standards that our regulators, customers, and investors expect.”
In addition, HSBC is currently being investigated by the Department of Justice, the Manhattan District Attorney’s Office, and Foreign Assets Control of the U.S. Treasury, among other regulators.
The London-based bank is the biggest in the U.K. and Europe by assets.
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