This past December the U.S. Department of Justice announced a record-setting anti-money laundering settlement with U.K. bank HSBC, claiming it allowed hundreds of millions of dollars from Mexican drug traffickers to flow through accounts in the United States. In total, HSBC paid more than $1.9 billion in penalties.
While few broker-dealers or investment advisors have the risk exposure of an entity like HSBC, this case is expected to have a substantial impact on anti-money laundering (AML) compliance requirements going forward. That’s because federal regulatorswho have been proposing substantially more proactive AML measures for broker-dealers and investment advisors for more than a decadeare expected to leverage the massive media attention the HSBC case has generated to bolster their AML efforts in 2013. Moreover, perhaps most ominously, Congress criticized HSBC’s regulators for laxness in past oversight.
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