HSBC draws line under Mexican cartel case after five-years on probation

HSBC draws line under Mexican cartel case after five-years on probation

Europe's biggest bank paid a $1.9 billion fine and entered into the five-year deal in 2012 for failing to prevent Mexican drug cartels from laundering hundreds of millions of dollars.

HSBC is no longer under threat of prosecution in the USA over allegations of money laundering in Mexico.

In its annual report this year, HSBC said that the monitor concluded that the bank continued to make progress in enhancing its compliance controls, but expressed "significant concerns about the pace of that progress" and "instances of potential financial crime" that were being reviewed by the Justice Department and the bank.

HSBC shares rose 2.5 percent, the most among major European banks, as the STOXX European index of 600 lenders () rose by 0.28 percent.

The bank said on Monday that the monitor, former United States district attorney and financial crime expert Michael Cherkasky, would "continue in that capacity for a period of time at the FCA's discretion". The motion came nearly exactly five years after the Justice Department put HSBC under the deferred prosecution agreement and.

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At the same time the UK's Financial Conduct Authority appointed Cherkasky in a similar role on its behalf and HSBC said he would "continue in that capacity for a period of time at the FCA's discretion". The agreement also pushed off any criminal prosecutions-making it a deal one observer said at the time amounted to "the world's largest wrist slap".

As part of the agreements with the US prosecutors and Britain's Financial Conduct Authority (FCA), HSBC also installed an independent monitor charged with producing annual reports on the progress of its reforms on fighting financial crime.

On Monday, HSBC said it had "lived up to all of its commitments" under the DPA and was pleased that the DoJ had recognised its progress in strengthening its compliance with anti-money laundering rules and sanctions rules.

HSBC says the DPA has now expired. The bank is working on "further improvement" to its capabilities, he added.

Ian Gordon, an analyst at financial firm Investec, said: "It is clearly a relief that the DPA has not been extended in contrast to Standard Chartered".

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