UK regulators “hampered” with prosecution of HSBC

US Department of Justice’s decision to prosecute HSBC for money laundering in 2012, “influenced” by FSA.

The UK’s Financial Services Authority (FSA) – the regulator that preceded the Financial Conduct Authority - has been accused of obstructing the prosecution of British bank HSBC for money-laundering charges in 2012.

Members of the US Republican party opened an investigation in 2013 into what happened throughout the case against HSBC.

It found the FSA were partly to blame for HSBC not being prosecuted. 

The report, published this week, concluded the FSA had “influenced” the Department of Justice’s (DOJ) decision on whether to prosecute HSBC.

It said the FSA appeared to have “hampered the US government’s investigations and influenced DOJ’s decision not to prosecute HSBC.”

HSBC were ordered to pay $1.9 billion to US authorities for money laundering activities in 2012, as an investigation found it “lacked the controls” needed to stop drug barons in Mexico laundering money.

The FSA have been accused of lobbying to defer HSBC’s prosecution at the time, as it complained US regulators were “picking on British banks”.

The recently published report also found attorney general Eric Holder had ignored advice from prosecutors that HSBC should be criminally charged.

The deferred prosecution led to the “too big to jail” dispute, which is still debated today.