HSBC has said it could face criminal or civil charges in the
US from a developing
investigation into allegedly illegal financial transactions, with some of these
activities tied to Iran.

The disclosure, made in a regulatory filing with the
Securities and Exchange Commission, showed that inquiries about the activities
of the UK/Hong Kong-listed bank have taken an increasingly serious turn. In
late January, it was reported that the firm was being probed by a US Senate panel
in a money-laundering enquiry.

In a statement, HSBC referred to dealings with “Iranian
parties” as a subject of US
action.

“We continue to cooperate in ongoing investigations by the US
Department of Justice, the New York County District Attorney’s Office, the
Office of Foreign Assets Control, the Federal Reserve and the OCC regarding
historical transactions involving Iranian parties and other parties subject to
OFAC economic sanctions,” the statement, published on the bank’s website, said.

“The investigations are ongoing. Based on the facts
currently known, we are unable at this time to determine the terms on which the
ongoing investigations will be resolved or the timing of such resolution or for
us to estimate reliably the amounts, or range of possible amounts, of any fines
and/or penalties. As matters progress, it is possible that any fines and/or
penalties could be material to our financial statements,” the statement said.

Reports said the Manhattan
district attorney and Justice Department have settled with a number of European
banks that operated transfer systems for Iranian clients.

The bank spoke of possible “imposition of civil money
penalties, criminal fines and other sanctions relating to activities that are
the subject of the AML/BSA Consent Orders”.

In April last year, HSBC Bank USA received a subpoena from
the SEC directing the bank to produce records in the US
related to, among other things, HSBC Private Bank Suisse’s cross-border
policies and procedures, as well as adherence to US broker-dealer and investment
advisor rules when dealing with US resident clients.