Title: HSBC's Money Laundering Scandal
Headings: HSBC's Money Laundering Scandal
HSBC's Money Laundering Scandal
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Content: HSBC's Money Laundering Scandal
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HSBC's Money Laundering Scandal
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Marc Ross has 20+ years in financial services industry. He is formerly a senior compliance consultant at John Hancock. Learn about our editorial policies
Marc L. Ross
Updated Jun 25, 2019
HSBC Holdings ' (NYSE: HBC) agreement to pay a $1.9 billion fine to regulators and enter into a deferred prosecution agreement points to lack of adequate control processes in compliance and anti-money laundering. Given the bank's size, it appears that it and some of its peers are too big to jail because they are too big to fail. The agreement constitutes a warning to the bank to clean up its act and avoids revocation of its charter to operate in the United States. The action was taken by regulators in the belief that a failure of a large financial institution could imperil the world's financial system. SEE: The Banking System
Why Did These Transgressions Come About? In the case of HSBC, cost cutting as part of a wide-ranging restructuring of the bank - through selling unprofitable businesses and centralizing its global structure - took a toll on the bank's compliance department.