HSBC at Risk of U.S. Charge Affecting 2012 Agreement

The video discusses HSBC's deferred prosecution agreement with the Department of Justice, which dates back to 2012 due to control failures around money laundering and sanctions violations. A 2011 trade, predating the agreement, is under scrutiny to determine if HSBC handled it correctly. The DOJ is investigating whether the bank's actions were appropriate, which could affect their current legal standing. The process of tearing up a DPA is complex, with differing opinions within the DOJ. If the DPA is revoked, HSBC may face ongoing legal challenges, impacting its business operations.

What is the primary reason for HSBC's deferred prosecution agreement with the Department of Justice?

• Tax evasion

• Control failures around money laundering and sanctions violations

• Insider trading

• Fraudulent accounting practices

What is the significance of the trade conducted by HSBC in 2011?

• It resulted in a new partnership with the DOJ

• It led to a merger with another bank

• It was a major financial success for HSBC

• It predates the deferred prosecution agreement and is under investigation

What is one of the challenges in tearing up a deferred prosecution agreement?

• It automatically leads to the closure of the bank

• There are differing opinions within the Department of Justice

• It is a straightforward process with little disagreement

• It requires approval from international banks

What might HSBC do if their deferred prosecution agreement is revoked?

• Appeal the decision

• Close down operations

• Accept the decision without contest

• Merge with another bank

What is a potential consequence for banks with guilty pleas?

• Guaranteed government bailout

• Loss of access to lucrative businesses

• Immediate closure of the bank

• Automatic increase in stock prices