Global Financial Integrity Calls for Tough Sanctions on HSBC by Regulators

December 6th, 2012

Deferred Prosecution Agreement Could Be A “Get-Out-Of-Jail-Free Card”

WASHINGTON, DC – Global Financial Integrity today called for regulators to follow-through with prosecutions for any illegal anti-money laundering lapses at HSBC Holdings Plc.

A December 5th article by Reuters reported that HSBC’s settlement with federal regulators for violations of federal anti-money laundering laws could be announced next week and, “will likely involve HSBC entering into a deferred prosecution agreement with federal prosecutors,” according to their sources.

The report also noted that HSBC Holdings Plc could face a record-setting fine of $1.8 billion. As Global Financial Integrity noted when the news about HSBC broke earlier this year, fines and criminal prosecutions must be severe enough to shift economic incentives and deter future crime. Previous fines have not been large enough to have that effect.

GFI noted that regulators ordered HSBC in 2003 to improve its anti-money laundering controls, but little changed at the bank.

Heather A. Lowe, director of government affairs at Global Financial Integrity, commented on the rumored settlement, “Over the past decade, the DOJ has handed out plenty of deferred prosecution agreements in money laundering and sanctions cases. Unfortunately, the evidence is mounting to suggest that they are not successful in preventing future crime.”

“At some point, guilty individuals and companies are just guilty. Law enforcement has to stop handing out get-out-of-jail free cards. Banks can’t be too big to prosecute, and the people responsible for making the decisions to launder criminal money must be held legally accountable.”

Raymond Baker, Director of Global Financial Integrity, added, “The practices implemented by these banks had real-life consequences. Money Laundering is not a victimless crime. 50,000 people have died in Mexico since 2007 due to violence by the criminal networks laundering their money through banks in the U.S. and around the world. And the people making those decisions need to be held responsible.”



Clark Gascoigne
202-293-0740 x 222

Notes for Editors:

  1. Read Heather Lowe’s speech, “Players: The Role of Facilitators and Super-Fixers,” given on June 25th, 2012 before The Center for Complex Operations at the National Defense University, Washington DC.


Global Financial Integrity (GFI) is a Washington, DC-based research and advocacy organization which promotes transparency in the international financial system.

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