This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

HSBC's Stock Thrives Despite $1.92 Billion Fine

Stocks in this article: HBCSTANBCSING

While the fine is the largest ever for money laundering violations, HSBC's share gains indicate some investors in the bank see the settlement as a positive. Still, HSBC faces a host of legal challenges, even after settling money laundering violations with U.S. authorities.

HSBC will also continue to improve its anti-money laundering compliance and, according to the settlement, the bank will have an independent monitor evaluate the implementation of new controls over a five year period.

On Tuesday, Bank of America Merrill Lynch analyst Michael Helsby highlighted that the settlement puts a floor on HSBC's exposure to anti money laundering violations, but noted litigation remains a risk for the bank.

"While the settlement with the US authorities may draw a line under these specific AML related issues, HSBC remains subject to a number of significant litigation Issues," wrote analyst Michael Helsby in the report, citing the bank's continued exposure to a $9 billion class action lawsuit related to Bernard Madoff's Ponzi scheme, Libor-related lawsuits, and a $3.5 billion claim tied to practices at its former U.S. lending arm Household, among others.

Helsby gives the bank an underperform rating.

Other European banking conglomerates have also come under scrutiny for violating anti-money laundering controls. On Monday, Standard Chartered (STAN) paid $327 million to federal and state authorities to settle allegations the bank transacted payments for restricted Iranian and Sudanese clients.

In June, ING settled with U.S. authorities over restricted payments to Iran and Cuba for $619 million.

Meanwhile, over a dozen global banks face regulatory fines related to the manipulation of short-term interest rates. In June, Barclays paid $450 million to settle a host of rate manipulation allegations with global regulators that signaled widespread fraud in the market.

-- Written by Antoine Gara in New York

2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs