US regulators launch HSBC investigation

AMERICAN authorities are investigating the stateside arm of global banking group HSBC over its compliance with anti-money-laundering procedures, it emerged yesterday.

It follows Royal Bank of Scotland being fined 5.6 million on Tuesday by the Financial Services Authority, Britain's financial regulator, for lax controls in failing to enforce rules brought in to prevent money-laundering and stop financial institutions lending cash to terrorists groups. UBS was also targeted in an American tax evasion inquiry last year.

In a filing to the US Securities & Exchange Commission, which was posted on Monday, HSBC USA stated it had received subpoenas and other requests for information as part of the investigation.

HSBC said in the filing that it was being investigated by the Office of the Comptroller of the Currency, the Federal Reserve Bank of Chicago, the US Attorney's Office and the US Department of Justice.

"These examinations and inquiries pertain to, among other matters, our global banknotes business and our foreign correspondent banking business, and our compliance with the Bank Secrecy Act, Anti-Money Laundering and Office of Foreign Assets Control requirements," the filing said.

HSBC, which this week posted near-doubled interim profits of 7bn, said in the filing that it had already taken several steps to address the concerns of US regulators "by enhancing risk management and strengthening processes and the supporting infrastructure in our Bank Secrecy Act and Anti-Money Laundering functions".