10 December 2012 Last updated at 18:39 ET
HSBC 'to pay $1.9bn' in US money laundering settlement

HSBC is to pay US authorities $1.9bn (£1.2bn) in a settlement over a money-laundering probe, say reports, the largest ever in such a case.

The UK-based bank was alleged to have helped launder money belonging to drug cartels and states under US sanctions.

Earlier this year HSBC admitted having poor money laundering controls following a US Senate investigation.

Last month announced it had set aside $1.5bn to cover the costs of any settlement or fines.

The deal could be announced as early as Tuesday, the Wall Street Journal reports.

It follows the announcement of a similar but much smaller settlement with UK-based Standard Chartered bank, which will pay $300m in fines for violating US sanction rules.

The $1.9bn sum in the HSBC settlement is expected to include around $1.25bn forfeited by HSBC - the largest amount ever paid out in such a case - and a $650m civil fine.

The settlement had been widely expected following a report by the US Senate, published earlier this year, that was heavily critical of HSBC's money laundering controls.

The report suggested HSBC accounts in Mexico and the US were being used by drug barons to launder money.

It also said HSBC regularly circumvented restrictions on dealings with Iran, North Korea, and other states under US sanctions.

HSBC admitted its money laundering controls were not strong enough following the Senate report.

On Tuesday the London-based multinational announced it had appointed a former US official as its head of financial crime compliance.

Bob Werner was previously the head of the US Treasury's Office of Foreign Assets Control (OFAC) - the agency responsible for enforcing the US sanctions on countries including Iran.

He will be responsible for beefing up HSBC's anti money laundering and sanctions compliance systems.

http://www.bbc.co.uk/news/business-20673466#