HSBC Holdings plc

In December 2012, HSBC Holdings plc and HSBC Bank USA entered a major U.S. criminal and regulatory resolution over anti-money-laundering and sanctions violations. The U.S. Department of Justice said HSBC agreed to forfeit $1.256 billion and enter a deferred prosecution agreement. HSBC also agreed to pay $665 million in civil penalties, bringing the combined penalties and forfeitures to approximately $1.92 billion. DOJ stated that HSBC Bank USA failed to maintain an effective anti-money-laundering program and adequate due diligence over foreign correspondent accounts. U.S. prosecutors said at least $881 million in narcotics-trafficking proceeds moved through HSBC Bank USA and that the group also processed prohibited transactions involving sanctioned jurisdictions. HSBC accepted responsibility for the conduct and agreed to enhanced compliance obligations and independent monitoring. Source: U.S. Department of Justice https://www.justice.gov/archives/opa/pr/hsbc-holdings-plc-and-hsbc-bank-usa-na-admit-anti-money-laundering-and-sanctions-violations

In May 2024, the UK Financial Conduct Authority fined HSBC UK Bank plc, HSBC Bank plc and Marks and Spencer Financial Services plc a combined £6,280,100 for failures in the treatment of customers who were in arrears or experiencing financial difficulty. The FCA found that between June 2017 and October 2018 HSBC did not always properly consider customers' individual circumstances, did not consistently perform appropriate affordability assessments before agreeing repayment arrangements and sometimes took disproportionate action against customers who had fallen behind. The regulator attributed the failures to deficiencies in policies, procedures, staff training and controls for identifying unfair customer treatment. HSBC identified the issues in 2018, notified the FCA and undertook remediation. Source: Financial Conduct Authority https://www.fca.org.uk/news/press-releases/fca-fines-hsbc-6-million-over-treatment-customers-financial-difficulty

In December 2021, the UK Financial Conduct Authority fined HSBC Bank plc £63,946,800 for failings in its anti-money-laundering transaction-monitoring systems. The FCA found serious weaknesses in three key parts of HSBC's automated monitoring controls from 31 March 2010 to 31 March 2018. These included failures to adequately assess whether monitoring scenarios covered relevant risks, failures to appropriately test and update system parameters, and failures to check the accuracy and completeness of data feeding the monitoring systems. The FCA said the weaknesses persisted for a prolonged period despite internal and external reports highlighting concerns and exposed HSBC to avoidable financial-crime risks. HSBC did not dispute the FCA's findings and received a 30% settlement discount. Source: Financial Conduct Authority https://www.fca.org.uk/news/press-releases/fca-fines-hsbc-bank-plc-deficient-transaction-monitoring-controls