HSBC Mexico chief says fine concludes money-laundering probe

Mexico's probe into the local operations of Europe's biggest bank, HSBC Holdings Plc, over lax controls against money laundering has concluded following a fine imposed by regulators, the bank's head in Mexico said on Thursday.

Mexico's National Banking and Securities Commission (CNBV) levied the $27.5 million fine a week after a scathing Senate report slammed HSBC for letting clients shift funds from dangerous and secretive countries.

Luis Pena, HSBC's chief executive in Mexico, said the bank recognized its mistakes and that the issue was now settled after the fine, the biggest-ever handed out to a bank by the CNBV.

"The case is concluded," Pena told Mexican radio. "As I say, this was about serious administrative faults."

"These administrative faults didn't give our bank the right kind of protection from undesirable people who could have used our bank to channel funds of illicit origin."

The CNBV censured HSBC for noncompliance with anti-money laundering systems and controls as well as its late reporting of 1,729 unusual transactions, failing to report 39 unusual transactions, and 21 administrative failures.

Last week, a Senate panel alleged that HSBC acted as a financier to clients routing funds from the world's most dangerous places, including Mexico, Iran and Syria, doing regular business in areas tied to drug cartels, terrorist funding and tax cheats.

The Senate report slammed a "pervasively polluted" culture at the bank and said between 2007 and 2008, HSBC's Mexican operations moved $7 billion into the bank's U.S. operations.

[Source: Reuters, Mexico City, 26Jul12]

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