'Bonuses restricted' after HSBC is ordered to pay $1.9bn to settle money-laundering probe

Bank accused of violating the Bank Secrecy Act and the Trading With the Enemy Act

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The Independent Online

HSBC bosses will have bonuses restricted under the terms of a record €1.9 billion (£1.2 billion) settlement with US regulators after the bank allowed rogue states and drug cartels to launder billions of pounds through its US arm.

Senior executives are to reportedly defer a portion of any bonuses they are awarded for the next five years as part of an agreement with the US Department of Justice (DoJ).

The investigation focuses on billion dollar money-transfers on behalf of nations under international sanctions, such as Iran, as well as organised crime groups and drug cartels ‘cleaning’ money in the US financial system.

A spokesman for US law enforcement said HSBC will pay $1.25 billion in forfeiture and $655 million in civil penalties. The $1.25 billion figure is the largest forfeiture ever in a case involving a bank.

Under what is known as a deferred prosecution agreement, the financial institution will be accused of violating the Bank Secrecy Act and the Trading With the Enemy Act.

Under the deferred prosecution arrangement, HSBC will admit to certain misconduct, the official said, but the details of those admissions to be made in a New York court were not immediately available.

Nevertheless the deferred prosecution agreement means the bank won't be prosecuted further if it meets certain conditions, such as strengthening its internal controls to prevent money laundering. The Justice Department has used such arrangements often in cases involving large corporations, notably in settlements of foreign bribery charges.

The law enforcement official said an announcement of the agreement could come as early as today.

The bank said it is cooperating with investigations but that those discussions are confidential.

Asked whether senior bank executives should be personally held to account over money-laundering, Prime Minister David Cameron told the House of Commons Liaison Committee: "It is a very serious offence. We do have quite strict controls in this country in terms of how banking regulation and money-laundering regulation works.

"I have always said, with respect to bankers, if they get it wrong, like anybody else, they should feel the full force of the law."