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Money Laundering.

The Global Problem

What is Money Laundering?

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What is Money Laundering?

Money laundering is the process by which criminals attempt to hide and

disguise the true origin and ownership of the proceeds of their criminal

activities. The term Money Laundering is also used in relation to the

financing of terrorist activity (where the funds may, or may not, originate

from crime).*

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Criminal ActivitiesDrug

Traff icking Br ibery /

Corrupt ion

Prost i tut i

on

Gambli

ng

Tax

Evasion

Extor t ion

Robbery

and Fraud

Whit e Collar

Crimes

( including

InsiderTrading and

Securit ies

offences)Smuggl ing(arms, p eople, goods)

Coun terfei t ing and

Forgery

Kidnapp

ing

Serious Crime or Al l

Crimes?

Organise

d

Cr ime

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HSBC in Money

Laundering Scandal

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The top executives including the CEO ofHSBC Holdings plc(HBC)are set to face a tough inquiry by the congressional committee for theiralleged involvement in money laundering during the period 2004-2010.Moreover, the representatives of the regulatory authority Comptrollerof the Currency are also summoned for the judicial inquiry for theirnegligence. This reflects the U.S. governments constant efforts to

restrain funding that were made available for anti-social activities.

After year-long investigation into banks compliance with anti-moneylaundering rules, the subcommittee has accused the bank of failing tomeet those rules. This could possibly result in hefty penalties,amounting around a billion, for HSBC. Apart from the senatorialcommittee, the Department of Justice and the Office of Foreign AssetControl are also investigating the bank regarding the same.

RELATED QUOTES

http://finance.yahoo.com/q?s=hbchttp://finance.yahoo.com/q?s=hbc

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The investigation revealed substantial lapses in thebank's anti-money laundering compliance. This resultedinto a worldwide displacement of funds from riskiernations through the bank. Controversial transactions

pertaining to its Iranian clientele and the illegal narcoticstrade in Mexico have drawn maximum attention.

The U.S. and the European Union is seeking to curbIrans various contentious projects. As a result, it has

been trying to stop funding made available to the Iranian

government by keeping a tab on the countrys bankingactivities. Moreover, the U.S. is trying to curb drugs tradein Mexico. Consequently, HSBCs carelessness

regarding the money laundering rules has not gone downvery well with the American government.

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Other Banks Invo lved in the Scandal

Earlier this year, the U.S. government held Netherlands-basedING Groep NV(ING) responsible for transferring billions ofdollars through the American financial system to nations thatwere economically restricted by the U.S. As a result, INGbank ended up paying $619 million in penalties.

Moreover, Wachovia bank, acquired by Wells Fargo &Company(WFC) in 2008, was accused of facilitating fundstransfer related to Mexican Drug cartel. It ended up paying$160 million as compensation.

http://finance.yahoo.com/q?s=inghttp://finance.yahoo.com/q?s=wfchttp://finance.yahoo.com/q?s=wfchttp://finance.yahoo.com/q?s=ing

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HSBC profit drops after money laundering fine.

HSBC paid nearly $2 billion last year to settle a money-laundering case brought by U.S. officials that dealt with illicitdrug money from Mexico. It paid another $1.4 billion fine in

the U.K. for improperly selling financial products to customersand also wrote down the value of its own debt by $5.2 billion.

The company's shares down nearly 3 percent to 7.06 poundsin early trading in London.

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Presented by Jinkal SoniRoll no.163