The British bank HSBC is to pay almost $2 billion to U.S. authorities to settle a case over money-laundering and sanctions busting.
The penalty is the biggest in the history of U.S. banking regulation.
The offenses were fairly blatant; this was not sophisticated chicanery like interest-rate rigging. HSBC admitted money-laundering on a heroic scale: funneling billions of dollars of dirty cash from Mexican drug cartels into the U.S., dealing with terrorists, and doing business with rogue states like Iran.
The penalty the bank’s paying is undeniably large. But it amounts to only 10 percent of HSBC’s annual profit.
Money-laundering expert and best-selling author Jeffrey Robinson is not impressed. “For a bank it’s simply the cost of doing business,” he says. “Unless you throw bankers in jail, and you put them in orange jump suits and you lock them away for a while, it will continue.”
HSBC said it was profoundly sorry for what it called “our past mistakes.” One senior executive has resigned, some bonuses have been clawed back, and the bank is spending a quarter of billion dollars lightening up its controls.