News

HSBC reaches tentative agreement in US over shareholder action regarding AML violations

10/09/2020

HSBC Holdings plc announced in its 2020 interim results released on 3 August that its US banking arm HSBC Bank USA N.A. has reached a tentative agreement with its current and former directors and officers in a derivative action fled in May 2014 in connection with acts of money laundering (ML) and sanctions evasion.

The 2014 complaint was filed by a shareholder of HSBC Holdings on behalf of HSBC Holdings, HSBC Bank USA N.A., HSBC North America Holdings Inc. and HSBC USA Inc., alleging that certain current and former directors breached their fiduciary duties and wasted corporate assets by “allegedly permitting and/or causing the conduct underlying the five-year deferred prosecution agreement (DPA) with the US Department of Justice”. The DPA saw HSBC agree to pay $1.92 billion to settle charges that it allowed Mexican drug money to be laundered through its branches.

In 2015, a New York state court granted HSBC a motion to dismiss, but the appellate court reversed the decision

and reinstated the case in 2018. In June, the court granted preliminary approval for a settlement between the

parties under which HSBC Holdings will receive a payment from directors and officers’ liability insurance carriers and will continue certain corporate governance practices.

The final settlement approval hearing has been scheduled for October

https://www.justice.gov/opa/pr/hsbc-holdings-plc-and-hsbc-bank-usa-na-admit-anti-money-laundering-and-sanctions-violations

https://www.hsbc.com/media/media-releases/2020/hsbc-holdings-plc-interim-results-2020

https://www.justice.gov/opa/press-release/file/1027316/download