HSBC will spend $700 million on a global programme to help vet its clients. The “know your customer” initiative is part of a 26-point plan agreed upon with U.S. regulators, reports ft.com.
This news follows the $1.9 billion the bank agreed to pay to settle a money laundering case. The settlement is being called the largest penalty any bank has ever had to pay.
Read: HSBC to pay $1.9 billion to settle money laundering case
Speaking at a press conference on the issue, assistant attorney general Lanny A. Breuer said, “HSBC is being held accountable for stunning failures of oversight – and worse – that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries.”
As a result of the government’s investigation, Breuer added the bank “has replaced virtually all of its senior management, clawed back deferred compensation bonuses given to some of its most senior U.S. anti-money laundering and compliance officers, and agreed to partially defer bonus compensation for its most senior officials during the five-year period of the deferred prosecution agreement.”