LONDON: The US Department of Justice has given HSBC a significant boost by dismissing the deferred criminal charges that have been hanging over the bank since it was fined for money laundering and sanctions breaches five years ago.
The decision by the DoJ lifts the threat of criminal prosecution that had been a “sword of Damocles” hanging over HSBC, as its new management team looks to put its misconduct-plagued past behind it.
HSBC said the DoJ would file a motion with the US District Court for the Eastern District of New York seeking the dismissal of the charges deferred by the agreement it reached as part of a settlement with the bank in December 2012.
The deferred prosecution agreement meant the DoJ could have reopened the criminal case against HSBC if the bank had repeated similar breaches during that period. Shares in HSBC rose 2 per cent on Monday morning.
The ending of the DPA is a vindication for the outgoing management team of Douglas Flint, who retired as chairman this year, and Stuart Gulliver, who is due to hand over as chief executive to his retail banking head John Flint in February.