Federal regulators issued a cease-and-desist order Thursday against HSBC North American Holdings and its subsidiary, HSBC USA, for alleged violations of the Bank Secrecy Act and other anti-money-laundering regulations.
The Office of the Comptroller of the Currency said it found deficiencies with the bank's suspicious activity reporting as well as monitoring of bulk cash purchases and international funds transfers. Though the order did not include a monetary fine, the OCC said a civil money penalty could still be issued against the bank.
"These findings resulted in violations by the bank of statutory and regulatory requirements to maintain an adequate BSA compliance program, file suspicious activity reports, and conduct appropriate due diligence on foreign correspondent accounts," the OCC said.
The Fed issued a similar order against the holding company, ordering it to improve its risk-management program, including beefing up its anti-laundering practices. Under the order, the bank's board has 30 days to submit a plan to strength the board's oversight, including hiring a full-time regional compliance officer and conducting a compliance risk assessment.
The company must also retain an independent consultant to review its anti-laundering compliance program.
HSBC agreed to make improvements to come into compliance with U.S. regulations. It previously disclosed it had been subject to ongoing examinations and investigations by regulators. "HSBC North America is continuing to work closely with its regulators to fully address and resolve issues raised," it said in a press release.
The company said it cooperated with regulators in reaching the agreement and would continue to do so.
