HSBC fined £64 million by the FCA for money laundering failures

SBC was today hit with a £64 million fine for “serious weaknesses” on money laundering, the latest blow to the global bank’s reputation.

City watchdog the Financial Conduct Authority said the bank had “unacceptable failings” between 2010 and 2018, including “inadequate monitoring” and poor assessment of risk.

The fine comes just days after rival NatWest was fined £265 million for money laundering. Gangs of criminals deposited hundreds of millions of pounds in cash at more than 50 NatWest branches, the investigation found.

HSBC itself has a long history of being in trouble with regulators. In 2012 it was found guilty of being used by Mexican cocaine gangs to launder drug trade money.

It paid record fines of $1.9 billion for that, with then CEO Stuart Gulliver saying: “We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes.”

Today FCA executive director Mark Steward said: “HSBC’s transaction monitoring systems were not effective for a prolonged period despite the issue being highlighted on numerous occasions.”

HSBC said it is “pleased to resolve this matter” adding it is “deeply committed to combating financial crime and protecting the integrity of the global financial system”.

The regulator said there was “inadequate monitoring of money laundering and terrorist financing scenarios until 2014, and poor risk assessment of “new scenarios” after 2016.

Europe’s biggest bank was found to have had inappropriate testing and did not check the accuracy and completeness of data.

The fine raises fresh question about HSBC’s global sprawl. It is seen as a slicker operation under CEO Noel Quinn that it was in the past, but critics say it remains simply too unwieldy to manage.

An investigation by the US senate into its Mexican failings found that, despite the clear risks of doing business in that country, HSBC had it as a “low risk” operation.

The US Department of Justice spared HSBC a criminal prosecution only because it was too large to put out of business. It noted likely “collateral consequences” from such a prosecution including huge job losses.

In 2018, HSBC paid $100 million to settle allegations it had conspired to rig Libor, the benchmark rate at which banks lend each other money.

NatWest this week pled guilty to allowing a Bradford jeweller called Fowler Oldfield to deposit cash from black bin liners, some of which would break due to the weight of the money.