What are two risks to institutions for violating anti-money laundering laws as demonstrated by the 2012 HSBC settlement with United States authorities? (Choose two.)
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The 2012 HSBC settlement with United States authorities demonstrated several risks to institutions for violating anti-money laundering laws. Two of these risks are forfeiture of assets and civil money penalties.
Forfeiture of assets is one of the potential consequences for a financial institution that violates anti-money laundering laws. This occurs when the government seizes assets, such as bank accounts or property, that were obtained through illegal activity, including money laundering. In the case of the HSBC settlement, the bank was required to forfeit $1.256 billion in assets to the U.S. government.
Civil money penalties are another risk for financial institutions that violate anti-money laundering laws. These penalties are monetary fines imposed by the government for non-compliance with regulatory requirements. In the case of the HSBC settlement, the bank was required to pay a $665 million penalty to the U.S. government.
In addition to these two risks, there are other potential consequences for financial institutions that violate anti-money laundering laws. These can include loss of bank charter or license, which could result in the closure of the institution, and imprisonment of bank employees who are found to have participated in illegal activity. It is essential for financial institutions to have effective anti-money laundering programs in place to prevent these types of risks and comply with regulatory requirements.