HSBC bosses will have bonuses restricted under the terms of a record 1.9 billion US dollar (£1.2 billion) settlement with US regulators after the bank allowed rogue states and drug cartels to launder billions of pounds through its US arm.
Senior executives are to reportedly defer a portion of any bonuses they are awarded for the next five years as part of an agreement with the US Department of Justice (DoJ).
HSBC was previously found to have ignored warnings and breached safeguards that should have stopped the laundering of money from Mexico, Iran and Syria.
On another gloom-filled day for Britain's banks, HSBC unveiled the settlement, while three men were arrested as part of the Libor-rigging investigation and a Northern Rock spin-off revealed a huge compensation bill due to a far-reaching paperwork error.
HSBC reached agreement with several US authorities - including the DoJ - and expects to soon finalise a deal with the Financial Services Authority (FSA).
The bonus deferrals, under the terms of the DoJ's Deferred Prosecution Agreement, are expected to hit dozens of managers including chief executive Stuart Gulliver, Sky News reported.
Mr Gulliver, who took charge of HSBC at the beginning of last year after the breaches occurred, said: "We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again."
Earlier this year, a US Senate sub-committee found that the US arm of HSBC treated HSBC Bank Mexico, which transported seven billion US dollars (£4.5 billion) in cash in armoured vehicles to the bank in 2007 to 2008, as a "low-risk" client. It offered banking services to HSBC Bank Mexico despite the country's troubles with money laundering, drug trafficking and weak controls. And other foreign HSBC banks avoided safeguards designed to block transactions involving terrorists, drug lords and rogue regimes.
The revelations heaped pressure on Business Minister Lord Green, who was chairman of HSBC at the time the failings took place.
Unveiling the settlement, HSBC said that, in the past several years, the board has taken decisive action to direct management to "fix past shortcomings as they have come to light". HSBC Bank USA has, among other actions, increased its spending on anti-money laundering roughly nine-fold between 2009 and 2011 and increased its anti-money laundering staff nearly ten-fold. It has also ended 109 high-risk "correspondent relationships". It will now be monitored by the DoJ for five years to ensure these changes are fully implemented.