HSBC Fined $32,000 for Sanctions Violations

HSBC Bank USA, the U.S. unit of HSBC Holdings PLC, agreed on Tuesday to pay $32,400 to resolve sanctions violations.

Bloomberg News
A logo sits on a sign outside a HSBC Holdings PLC bank branch in London on Dec. 9, 2013.

The U.S. Treasury Department’s Office of Foreign Assets Control announced the penalty in a notice quietly posted to its website. It said the bank voluntarily disclosed the apparent violations, and they constituted a non-egregious case.

“OFAC concluded that the apparent violations…were not the result of willful or reckless conduct,” the notice said.

According to the notice, HSBC handled transactions in late 2010 and early 2011 worth about $40,000 that benefited Tajco, a company involved in international trade and real estate owned by Husayn Tajideen, both of which were placed under U.S. sanctions in December 2010 for financing Hezbollah.

“HSBC discovered this issue, and as noted in the OFAC filing, voluntarily self-disclosed and took appropriate remedial action. We now have a more robust compliance program in place,” said Robert Sherman, a spokesman for HSBC.

About a year ago, the bank entered into a record-breaking settlement,  agreeing to forfeit nearly $1.3 billion and pay a civil fine of $650 million for money laundering and assorted other violations. HSBC has since reorganized its compliance efforts.

But a Treasury spokesman said in an email that Tuesday’s settlement is unrelated to the December 2012 agreement with OFAC and other federal and state agencies.

“This action is similar to other settlements OFAC has reached with regard to apparent violations committed by U.S. financial institutions,” he said.

Concerns about HSBC’s interaction with Tajco have been in the public eye for about 18 months: Reuters and Rolling Stone each reported, citing ex-HSBC compliance officer Everett Stern, that the bank had handled money on behalf of Tajco and he had raised internal concerns about it.

Mr. Sherman declined to comment on the remarks of former employees.

-Rachel Louise Ensign contributed to this report.

Write to Samuel Rubenfeld at Follow him on Twitter at @srubenfeld.


Add a Comment

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (1 of 1)

View all Comments »
    • It will continue happening as long as the same philosophy that might makes right prevails.

Content from our sponsor


  • SEC Proposes New Rules: Pay-versus-Performance and Cross-border Swaps

    Some public companies may have to disclose the relationship between executive compensation paid and the financial performance of the company if a proposed rule issued by the Securities and Exchange Commission (SEC) is approved in its current form. Another SEC rule proposal could add new dealer registration requirements to transactions related to cross-border security-based swaps. Public comment for both proposals, which are summarized in Deloitte's "Accounting Journal Entries" briefing, are due in July.

  • Please note: The Wall Street Journal News Department was not involved in the creation of the content above.

Risk & Compliance Bureau

Search for Risk & Compliance Report Articles

About Risk & Compliance

  • Risk & Compliance provides news and commentary to corporate executives and others who need to understand, monitor and control the many risks that can tarnish brands, distract management and harm investors. Its content spans governance, risk and compliance and includes analysis of the significance of laws and regulations, the risks inherent in global expansion and the protective moves taken by companies.

    Contact our editors with news, comments and questions at:

    • Risk & Compliance on Facebook