HSBC agrees to pay $1.92 billion in fines for failing to prevent money laundering

HSBC agreed to pay a record $1.92 billion in fines to U.S. authorities for allowing itself to be used to launder a river of drug money flowing out of Mexico among other banking lapses.

Mexico's Sinaloa cartel and Colombia's Norte del Valle cartel laundered some $881 million through HSBC and a Mexican unit, the U.S. Justice Department said on Tuesday.

The bank acknowledged it failed to prevent money laundering and failed to conduct basic due diligence on some of its account holders.

"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes," HSBC Chief Executive Stuart Gulliver said.

Under the agreement, the bank agreed to take steps to fix the problems, forfeit $1.256 billion and retain a compliance monitor.

The bank also agreed to pay $665 million in civil penalties to regulators including to the Office of the Comptroller of the Currency, the Federal Reserve, and the Treasury Department.

The settlement is the third time in a decade that HSBC has been penalized for lax controls and ordered by U.S. authorities to improve its monitoring of suspicious transactions.