HSBC, on Tuesday, agreed to pay a record fine of $1.92 billion to settle charges that the British banking giant transferred billions of dollars for sanctioned nations, facilitated Mexican drug cartels to launder tainted money and worked with Saudi Arabian banks with ties to terrorist organizations.  The case, a major victory for the government, represents the conclusion of a multi-agency investigation. It convened the Justice Department, the Manhattan district attorney's office, bank regulators and the Treasury Department.

"HSBC is being held accountable for stunning failures of oversight - and worse - that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries, " Lanny A. Breuer, the head of the Justice Department's criminal division, said in a statement

The deal contained the following:

• Required the bank to admit to the accusations, lasts for 5 years. If the bank violates the terms of the agreement, prosecutors can move to indict the bank.
• Forfeit  $1.26 billion of revenue
• HSBC agreed to pay the Office of the Comptroller of the Currency $500 million as part of a civil penalty
• Federal Reserve assessed a $165 million civil penalty.
• HSBC also entered in a deferred prosecution agreement with the Manhattan district attorney's office, admitting that it violated New York State law by falsifying the records of New York financial institutions.

The turmoil at HSBC is playing out amid a broad crackdown on foreign by federal and state authorities to stanch the flow of illegal money across the world. The officials have been working to clamp down the financing pipeline to cartels and terrorist organizations.

A chronology of the bad moves and bad judgments led to the record fine:

• The original problems began when agents with Immigration and Customs Enforcement spotted questionable trails of money between HSBC's Mexican and United States operations.
• Despite a chorus of warnings from federal banking regulators about the vulnerability of HSBC's operations throughout the world, the bank didn't fortify its controls
• One of HSBC's branches in the Cayman Islands, the Senate report said, had virtually no oversight despite holding roughly 50,000 client accounts.
• Alarmed, a compliance officer complained and asked whether practices at the bank were part of "the School of Low Expectations Banking."
• Seeming complicity of senior bank executives, according to law enforcement officials briefed on the matter.
• HSBC's Mexican operations moved at least $7 billion from 2007 to 2009 into the United States. Such a large volume of money, law enforcement authorities warned, had to include "drug proceeds."
• In July, HSBC executives vowed to reform. As part of that, David Bagley, who served as head of compliance at the British bank since 2002, announced his resignation during the hearings.

HSBC has taken the following actions to the pleasure of the authorities.

• HSBC has since on a hiring spree, fortifying its ranks with seasoned executives. On Tuesday, prosecutors praised those efforts, noting that the bank cooperated with the investigation
• HSBC brought in Stuart A. Levey as chief legal officer in January. Mr. Levey, a former undersecretary at the Treasury Department who focused on terrorism and financial intelligence, 
• In its latest move to improve controls, HSBC promoted Mr. Warner on Tuesday to oversee a special unit dedicated to anti-money laundering.  Robert Werner formerly oversaw the group at the Treasury Department that enforces sanctions.