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HSBC

HSBC

Industry: 
Banking
Symbol: 
NYSE:HBC
States: 
DE
IL
NV
NJ
NY
Country: 
UK
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Sources: 

"For Syrian and Iranian citizens living in the Gulf, finding a bank to deal with just became a little tougher. Banks like Barclays and HSBC have begun turning away new customers from countries that are facing sanctions. They are closing down some existing accounts, further isolating Syrian and Iranian citizens from the global financial industry... Also under the new measures, Syrian or Iranian customers with bank balances of less than 100,000 dirhams, or $27,225, will be asked to close their accounts within 30 days. Customers with salaries of less than 15,000 dirhams will also be affected. This is because the cost to the bank of making the enquiries necessary to enforce compliance is higher than the benefit or 'profit potential' of keeping a customer with a small bank balance. It is cheaper for HSBC to close an account or not to open a new one with a balance of less than 100,000 dirhams." (The New York Times, "Sanctions Chill Reaches Banking Clients in the Persian Gulf," 2/13/13)

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"HSBC Holdings Plc's Dubai-based Middle East unit will stop personal-banking services to some customers with links to countries subject to European Union and U.S. sanctions, such as Syria and Iran. HSBC Bank Middle East Ltd. will only serve citizens of the affected nations that qualify for Advance and Premier accounts, which require a minimum balance of 100,000 U.A.E. dirhams ($27,225) and 350,000 dirhams respectively, if they 'completely satisfy' due-diligence requirements, according to a statement e-mailed by a Dubai-based spokeswoman for the bank. Customers started receiving letters at the beginning of February, and have been given 30 days' notice of the changed policies. London-based HSBC, Europe's largest bank by market value, agreed in December to pay $1.92 billion to settle U.S. probes of money laundering after Senate testimony indicated it handled so-called U-turn transactions through U.S. financial institutions that involved funds from Iran to non-U.S. banks." (Bloomberg,"HSBC Says It Will Stop Serving Some Syrian, Iranian Citizens," 2/7/13)

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"HSBC Holdings Plc (HSBA), Europe’s largest bank, agreed to pay $1.92 billion to settle U.S. probes of money laundering in the largest such accord ever.The settlement includes a deferred prosecution agreement with the U.S. Department of Justice, the London-based bank said in an e-mailed statement today. The U.K.’s Financial Services Authority said the bank will have to employ an independent monitor to oversee compliance with anti-money laundering requirements. Chief Executive Officer Stuart Gulliver’s attempts to reduce costs and improve profitability have been hurt by the U.S. probes and by compensation claims from U.K. clients. A Senate committee said in July that lax oversight by top HSBC executives gave terrorists and drug cartels access to the U.S. financial system. The settlement is the biggest reached in the U.S. over such allegations, topping the $619 million in penalties paid in June by the Netherlands’ ING Group NV. 'This has removed an uncertainty, though it doesn’t clear the path completely for HSBC,' said Lewis Wan, Hong Kong-based chief investment officer at Pride Investments Group Ltd., which doesn’t hold HSBC shares. 'Regulators have been tightening oversight of banks. Lenders like HSBC will have to continue to strengthen their compliance'. . .'We accept responsibility for our past mistakes,' Gulliver said in the statement. 'We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes.'In a range of measures, the bank has to have a group money laundering reporting officer and establish a board to oversee anti-money laundering controls, the FSA said in a statement today. HSBC will also spend $700 million over five years on a 'know your customer' review, it said." (Bloomberg, "HSBC to Pay $1.92 Billion in U.S. Money-Laundering Probe," 12/11/12)

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"HSBC Holdings Plc (HSBA) and Standard Chartered Plc (STAN) may settle U.S. charges involving money-laundering violations and dollar-clearing transactions on behalf of Iranian clients as soon as next week, two people familiar with the negotiations said . . . HSBC announced last month that it had added an $800 million provision to an existing $700 million reserve to cover the costs of a potential settlement, and warned investors that the final payment could 'significantly' exceed the $1.5 billion total. A Senate committee said in July that failures in London- based HSBC’s money-laundering controls allowed terrorists and drug cartels access to the U.S. financial system." (Bloomberg News, "HSBC, Standard Chartered Close to Resolving Iran Claims," 12/8/12)

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"HSBC said at its half-year results in the summer that it had set aside $700m to cover the cost of the scandal ... But Stuart Gulliver, HSBC’s chief executive, admitted the actual total could be higher. The final bill is now expected to have more than doubled to $1.5bn, forcing the bank to make a further provision of up to $800m in its third quarter results tomorrow, according to Sky News. HSBC is understood to have held talks with US authorities over the past few months to settle the claims, which came to light following a year-long investigation by a powerful US senate committee. The Senate Committee on Homeland Security in July branded HSBC as having been 'pervasively polluted for a long time' by allowing funds to be moved to and from its US branches to countries including Mexico, Syria, the Cayman Islands, Iran and Saudi Arabia. The scandal forced David Bagley to step down as HSBC’s head of compliance, while the bank’s chief, Mr Gulliver, issued a humbling apology... The bank has since initiated an overhaul of its compliance operations and hired a number of big hitters to raise standards, including Preeta Bansal, a former senior official in the Obama administration, who has been appointed global general counsel for litigation and regulatory affairs at HSBC... In addition to the increased money laundering bill, analysts at Nomura have warned that HSBC might have to make a new provision for the mis-selling of Payment Protection Insurance (PPI) of about £150m." (The Telegraph, "HSBC to face £1bn fines over money-laundering," 11/4/2012)

 

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"HSBC, for example, has a national charter rather than a New York state charter. So it is not subject to supervision by Lawsky's New York State Department of Financial Services (DFS), which has only been in existence since October... Two more banks, Standard Chartered and HSBC, are expected to settle related cases in the coming weeks, according to the source familiar with those probes." (Reuters, "Analysis: StanChart hit may not dog other banks as much as feared," 9/4/2012)

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"HSBC Holdings Plc (HSBA)’s head of group compliance, David Bagley, told a Senate hearing he will step down amid charges the bank gave terrorists, drug cartels and criminals access to the U.S. financial system by failing to guard against money laundering. Bagley was among at least six HSBC executives who testified before the Senate’s Permanent Subcommittee on Investigations today after the panel released a 335-page report describing a decade of compliance failures by Europe’s biggest bank. London- based HSBC enabled drug lords to launder money in Mexico, did business with firms linked to terrorism and concealed transactions that bypassed U.S. sanctions against Iran, Senate investigators said in the report . . . An article in the July 2005 issue documented the bank’s ties to Iran, Libya, Sudan and Syria. It reported the U.S. Treasury Department had fined HSBC for a transfer in April 2000 of $100,000 benefiting the Taliban, which at the time was running Afghanistan, and providing Osama bin Laden with the base from which he plotted the Sept. 11 attacks . . . The report also cited HSBC’s violations of Treasury Department sanctions on dealings with Iran, which the U.S. is working to isolate from the global banking system. The sanctions, enforced by the Office of Foreign Assets Control, or OFAC, seek to punish Iran for operating a nuclear program outside international inspection. Internal communications show the U.S. bankers were aware that some of the transactions were linked to Iran in violation of U.S. sanctions." (Bloomberg, "HSBC Executive Resigns at Senate Money Laundering Hearing," 7/17/12) 

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A scathing U.S. Senate report charges that Europe's largest bank exposed the U.S. financial system to money laundering by Mexican drug cartels as well as potentially illicit transactions involving Iran and other countries. The extensive report on London-based HSBC Holdings PLC by the Senate Permanent Subcommittee on Investigations was released ahead of a hearing on Capitol Hill Tuesday morning. The probe focused on the bank's key U.S. affiliate, HBUS, and also said U.S. regulators knew the bank had a poor system to detect problems but failed to take action. The sweeping allegations include accounts that two affiliates for years sent thousands of transactions through HBUS 'without disclosing links to Iran' even though they were supposed to. For that period from 2001 to 2007, an auditor so far has uncovered nearly 25,000 such transactions involving billions of dollars. It's unclear whether the transactions violated U.S. law, but the Senate report said that by evading safeguards, the affiliates 'may have facilitated transactions on behalf of terrorists, drug traffickers or other wrongdoers' . . . Ahead of the hearing, HSBC released a statement saying its executives will offer a formal apology at the hearing. 'We will apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong,' the statement said. The U.S. Justice Department said it is conducting a criminal investigation into HSBC's operations but declined to confirm that the bank is in settlement talks." (Fox News, "Senate report: European bank exposed US financial system to Iran, drug cartel transactions," 7/17/12)

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"HSBC, a banking and financial services giant headquartered in London, opened a representative office in Iran in November 1999. The bank has provided various loans to Iranian business over the decade, including a $108 million loan to the National Petrochemical Company of Iran in 2003. Dr. Nasser Homapour, senior representative for HSBC in Iran, said at the time, “The completion of this sizable transaction represents an important step in HSBC’s progressive engagement with Iran in general, and NPC in particular.' Due to pressure by the United States and other governments, the bank announced in 2007 that it would not seek any new business in Iran, but the company continues to maintain an office in Iran and service existing customers. “We will honor all existing binding commitments where permitted,” said HSBC spokesman, Ahmad Othman."  From 2000-2009, the company was the recipient of $404,500 US federal funds.  Their business in Iran is currently active, but there are no new plans for further invesment.  (The New York Times, "Profiting from Iran, and the US," 3/6/2010)

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"Another step the Obama administration should take is to sustain American pressure on foreign banks and oil companies to halt their dealings with Iran's energy sector. This effort has led such major firms as Germany's Deutsche Bank and Commerzbank, England's HSBC, Credit Suisse and Royal Dutch Shell to halt or limit their business with Iran." (The Baltimore Sun, "FACING THE IRANIAN THREAT," 12/9/08)

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"U.S. outreach to foreign banks and to oil companies considering investing in Iran's energy sector has reportedly convinced more than 80 banks and several major potential oil-field investors to cease all or some of their business with Iran. Among them: Germany's two largest banks (Deutsche Bank and Commerzbank), London-based HSBC, Credit Suisse, Norwegian energy company StatoilHydro, and Royal Dutch Shell." (The Wall Street Journal, "How To Put The Squeeze On Iran," 11/13/08)

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"European giants HSBC, Deutsche Bank and Credit Suisse have pulled out of Iran while BNP Paribas, Commerzbank and Dresdner Bank have severely curtailed their business with the Islamic republic. (Gulf Daily News, "US imposes sanctions on major Iran banks," 5/1/08)

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Listed by U.S. Government as doing business in Iran. (U.S. Securities and Exchange Commission, List of Companies Doing Business With State Sponsors Of Terror, Removed from the internet in July of 2007)

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"In late 2005, Dutch bank ABN Amro agreed to pay $80 million in fines stemming in part from improper transactions with Iran through its subsidiary in Dubai, United Arab Emirates. UBS Bank and Credit Suisse of Switzerland recently announced they were suspending most new business with Iran, and British-based HSBC said it would no longer accept dollar transactions from within Iran." (Los Angeles Times, "U.S. Puts The Squeeze On Iran's Oil Fields," 1/7/07)

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