HSBC Holdings Plc (HSBA), which is under investigation by U.S. regulators for laundering funds of sanctioned nations including Iran and Sudan, is in talks to settle the matter, two people with knowledge of the case said.
The bank, Europe’s largest by market value, made a $700 million provision in July for any U.S. fines after a Senate Committee found it had given terrorists and drug cartels access to the U.S. financial system. That sum might increase, Chief Executive Officer Stuart Gulliver has said.
Again, the issue is not whether some “bad transactions” happened. It is the allegation, which apparently has good foundation, that HSBC intentionally altered the data associated with the transactions in a bid to prevent detection.
“It’s time to reexamine the audit function of federal regulators,” said Gurule of U.S. regulations meant to enforce sanctions. “It’s bad and the system is not working.”
There is no debate to be had here. These are acts that were any ordinary person to undertake them would land the perpetrator in prison. The fact of the matter is that until we see some actual jail sentences and/or charter revocations there will be no change in this behavior, because it is incredibly profitable and if the only price is to pay a fine that is simply factored into the cost of the service.