The multiyear probe into money-laundering has resulted in settlements with Lloyd’s Banking Group Plc, ABN Amro Bank NV, Barclays Plc, Credit Suisse Group AG and ING.
Other European banks, including Deutsche Bank AG and Royal Bank of Scotland Group Plc, are cooperating with U.S. regulators in similar investigations, according to other people familiar with the matter. Two French banks, Credit Agricole SA and BNP Paribas SA, are working with U.S. authorities in similar probes, according to their regulatory filings.
“Here we are at bank number seven, with Standard Chartered, and no individual banker has been held criminally responsible, and that’s a shame,” said Gurule, a professor at the University of Notre Dame. “Checks and balances on banks weren’t working. Bad conduct was going on for years undetected.”
HSBC handled so-called U-turn transactions through U.S. financial institutions that involved funds from Iran to non-U.S. banks, altering its transaction records to obscure information about its clients, according to U.S. Senate testimony in July.
Around 25,000 transactions with Iran worth more than $19.4 billion were made with about 90 percent passing through the U.S., according to an audit by Deloitte LLP. Senate investigators documented similar transactions with North Korea, Cuba, Sudan and Burma, which along with Iran are subject to sanctions administered by the Office of Foreign Assets Control.
HSBC also dealt with Al-Rajhi Bank, a Saudi Arabian client whose account the bank closed in 2005 over alleged terrorist financing before reopening it in 2007, according to the Senate testimony.
Christopher Lok, former head of global banknotes at HSBC Bank USA, testified that while Al-Rajhi was a “controversial name,” the bank’s group compliance department had reversed earlier concerns and allowed business to proceed. David Bagley, HSBC’s head of group compliance, announced July 17 at the Senate hearing that he would step down.