Home / Issues / US deferred prosecution agreement with HSBC over anti-money-laundering and sanctions failures (December 2012)

US deferred prosecution agreement with HSBC over anti-money-laundering and sanctions failures (December 2012)

Settledas of 31 Oct 2026United StatesHSBC Holdings plcHSBC Bank USA N.A.draft

Current status

Confirmed fact · as of 11 Dec 2012

HSBC resolved the US matter by a five-year DEFERRED PROSECUTION AGREEMENT with the DOJ (criminal information filed, responsibility accepted) - a DPA, not a conviction and not a guilty plea.

Confirmed fact · as of 11 Dec 2012

The OCC, Federal Reserve, FinCEN and OFAC actions were civil/administrative; the total package was about USD 1.9bn.

Unanswered question · as of 11 Dec 2012

The separate UK Financial Services Authority undertaking referenced in HSBC's own statement was described as to be finalised 'shortly' and is not separately documented in this record.

B HSBC Holdings plc, HSBC announces settlements with authorities (stock exchange announcement, 11 December 2012) (11 Dec 2012) · retrieved 31 Oct 2026

Last reviewed 31 Oct 2026. An initial allegation is not the final event; this block is always shown.

How it unfolded

Issue raised · 11 Dec 2012

Proposition: US authorities alleged that HSBC Bank USA wilfully failed to maintain an effective anti-money-laundering programme and to conduct appropriate due diligence on foreign correspondent accounts under the Bank Secrecy Act, and that HSBC Group violated the International Emergency Economic Powers Act and the Trading with the Enemy Act by processing transactions for customers in Cuba, Iran, Libya, Sudan and Burma subject to US sanctions; court documents stated that at least USD 881m in drug-trafficking proceeds was laundered through HSBC Bank USA.

Affected parties: HSBC Holdings plc, HSBC Bank USA N.A., U.S. Department of Justice, U.S. Treasury Office of Foreign Assets Control, Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Financial Crimes Enforcement Network, UK Financial Services Authority

Originating record: A U.S. Department of Justice, HSBC Holdings Plc. and HSBC Bank USA N.A. Admit to Anti-Money Laundering and Sanctions Violations, Forfeit $1.256 Billion in Deferred Prosecution Agreement (11 Dec 2012) · retrieved 31 Oct 2026

Response · HSBC Holdings plc · 11 Dec 2012

Attributed claim · as of 11 Dec 2012

HSBC said it would pay about USD 1.921bn under the agreements, which included a deferred prosecution agreement with the DOJ. Group Chief Executive Stuart Gulliver said 'We accept responsibility for our past mistakes', restated the bank's deep regret, and said the current HSBC is fundamentally different from the one that made the mistakes, with new senior leadership since 2011 taking concrete remedial steps. HSBC cited a roughly ninefold increase in AML spending at HSBC Bank USA (2009-2011), revamped Know Your Customer processes, exit from 109 correspondent relationships, clawed-back bonuses, a new Head of Group Financial Crime Compliance, a global sanctions screening policy, and an independent monitor over the five-year DOJ agreement. — HSBC Holdings plc

B HSBC Holdings plc, HSBC announces settlements with authorities (stock exchange announcement, 11 December 2012) (11 Dec 2012) · retrieved 31 Oct 2026

Outcome · U.S. Department of Justice (Criminal Division and U.S. Attorney's Office, Eastern District of New York), with parallel actions by OFAC, the Federal Reserve, the OCC, FinCEN, New York County and Queens County District Attorneys, and (separately) the UK Financial Services Authority · 11 Dec 2012

settlementbinding

Confirmed fact · as of 11 Dec 2012

On 11 December 2012 HSBC resolved the matter through a five-year DEFERRED PROSECUTION AGREEMENT with the DOJ - not a conviction or a guilty plea. HSBC waived indictment and agreed to the filing of a four-count felony criminal information (wilfully failing to maintain an effective AML programme; wilfully failing to conduct due diligence on foreign correspondent affiliates; violating IEEPA; and violating the Trading with the Enemy Act) and accepted responsibility for the conduct. The monetary package totalled about USD 1.92bn: USD 1.256bn forfeiture to the DOJ plus USD 665m in civil AML penalties (USD 500m to the OCC and USD 165m to the Federal Reserve); a USD 500m FinCEN penalty was satisfied by the OCC penalty and a USD 375m OFAC settlement was satisfied by the DOJ forfeiture. The agreement required an independent compliance monitor for the five-year term.

A U.S. Department of Justice, HSBC Holdings Plc. and HSBC Bank USA N.A. Admit to Anti-Money Laundering and Sanctions Violations, Forfeit $1.256 Billion in Deferred Prosecution Agreement (11 Dec 2012) · retrieved 31 Oct 2026 · B HSBC Holdings plc, HSBC announces settlements with authorities (stock exchange announcement, 11 December 2012) (11 Dec 2012) · retrieved 31 Oct 2026

Remedy: USD 1.256bn forfeiture to the DOJ; USD 665m in civil AML penalties (OCC USD 500m, Federal Reserve USD 165m); satisfaction of related FinCEN (USD 500m) and OFAC (USD 375m) penalties; a five-year independent compliance monitor and remediation obligations.

Appeal/review: none — Negotiated resolution; the DOJ deferred prosecution was for a five-year term, with prosecution to be dropped if HSBC met its obligations. No criminal conviction was entered. A U.S. Department of Justice, HSBC Holdings Plc. and HSBC Bank USA N.A. Admit to Anti-Money Laundering and Sanctions Violations, Forfeit $1.256 Billion in Deferred Prosecution Agreement (11 Dec 2012) · retrieved 31 Oct 2026

How to read this. Allegation, response and outcome are separate, dated records. "Decided/resolved" appears only where a cited outcome supports it. Materially affected parties can request a correction via Corrections & response.