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HSBC may face $1.8bn penalty from US regulators over anti-money laundering violation

London based bank HSBC is negotiating with the US regulators and might pay a fine of $1.8bn, for violating anti-money laundering rules.

The lender may also sign a deferred prosecution agreement with federal prosecutors to settle the charges within few days, according to media sources.

An HSBC spokesman said, "We are cooperating with the authorities in the ongoing investigations. The nature of discussions is confidential."

The bank has already set aside $1.5bn to cover an impending fine for breaching anti-money laundering controls in Mexico as well other violations, including Bank Secrecy Act and Office of Foreign Assets Control investigations.

The lender anticipates that the fine could be much higher.

The US Senate Permanent Subcommittee in its probe also found the bank guilty for allowing customers to move shadowy funds from Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria.

Commenting on the case, Jimmy Gurule, an ex-enforcement officer at the US Treasury, said that the only way to properly punish banks involved in such violations is to initiate criminal proceedings against individuals, instead of imposing financial penalties only.