US And UK settlements

Author:Mr Patrick Ploeger, Marnix Somsen and Roan Lamp
Profession:De Brauw Blackstone Westbroek N.V.
 
FREE EXCERPT

2012: record breaking year for US corporate settlements

In 2012, the Department of Justice ("DoJ") reached corporate settlements for a total amount of USD 9 billion, which was more than USD 3 billion higher than the previous high set in 2006. Important contributions to this record-breaking amount were made by GlaxoSmithKline, which paid a fine of USD 3 billion for drug misbranding, the British bank HSBC ("HSBC"), which paid a fine of USD 1.9 billion for money laundering compliance failures, and UBS, which agreed on a settlement of USD 1.5 billion for fraud. See below for more information.

HSBC reaches settlement with US authorities over flaws in compliance

HSBC reached a settlement with US authorities for a total sum of USD 1.9 billion. This amount consisted of a forfeit of USD 1.25 billion in proceeds that HSBC gained by its illegal activities, while USD 655 million was added to this sum as a fine. HSBC failed to maintain adequate measures against money laundering, according to the US authorities. The DoJ announced that Mexican drug cartels conducted operations through HSBC for a total amount of USD 881 million. HSBC was also charged with violating US sanctions against Iran, Libya, Sudan, Burma and Cuba. In July 2012, a US Senate subcommittee concluded that HSBC provided an easy gateway into the US financial system for all kinds of illicit money.

UBS pays hefty fine for Libor manipulation

UBS was the second international bank to be fined for activities that involved manipulating LIBOR, the inter-bank lending rate, according to international authorities. The Swiss bank reached an agreement with the US, the UK and Swiss regulators on a USD 1.4 billion fine. USD 1.2 billion will be allocated to the DoJ, while the British Financial Services Authority ("FSA")will receive USD 160 million and the Swiss Financial Market Supervisory Authority will receive USD 63 million. In June 2012, British bank Barclays was fined an amount of USD 450 million by US and UK regulators for its apparent participation in the manipulation of LIBOR. Other banks are still under investigation for similar conduct.

Standard Chartered agrees to pay total of USD 667 million in settlement

The British bank Standard Chartered agreed to pay USD 327 million in a settlement with the U.S. Federal Reserve Board, the U.S. Treasury, the DoJ and the District Attorney for New York County. In August 2012, the bank accepted a USD 340 million fine imposed by the recently created New...

To continue reading

REQUEST YOUR TRIAL