For the government not to go a step further and prosecute was "beyond obscene," Bill Black, a former U.S. regulator for the Office of Thrift Supervision who now teaches at the University of Missouri-Kansas City, told The Associated Press.
"Regulators are telling us, 'Yes, they're felons, they're massive felons, they did it for years, they lied to us, and they made a lot of money ... and they got caught red-handed and they're gonna walk.'"
Black disputed the government's concern that indicting HSBC could take down the financial system.
"That's the logic that we get stability by leaving felons in charge of our largest banks," he said. "This is insane."
Under the settlement, the bank agreed to forfeit nearly $1.26 billion for violations of the federal laws, including the Bank Secrecy Act and Trading With the Enemy Act.
HSBC Bank also agreed to pay $665 million in civil fines as a result of its misconduct. Penalties that will be paid under the "deferred prosecution agreement."
On Tuesday, HSBC was charged with a four-count felony in federal court in the Eastern District of New York by: Ihlenfeld; Loretta Lynch, a U.S. Attorney in Brooklyn; and Jaikumar Ramaswamy, head of the Justice Department's Asset Forfeiture and Money Laundering Section.
According to the charges, HSBC Bank failed to maintain an effective money-laundering program at its U.S. operations.
HSBC also conducted illegal financial transactions involving customers in Cuba, Iran, Libya, Sudan and Myanmar -- nations subject to sanctions under the federal Office of Foreign Assets Control.
Reach Paul J. Nyden at pjny...@wvgazette.com or 304-348-5164.