HSBC's Swiss branch has attracted the attention of authorities following intensive media coverage of the data stolen by ex-employee Hervé Falciani
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The Geneva public prosecutor says it has initiated proceedings against the Swiss branch of HSBC for suspected money laundering. The justice authorities on Wednesday carried out a search of the bank’s premises.
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The prosecutor announced that following recent public revelations about the HSBC Private Bank – a Swiss subsidiary of a leading British bank – a criminal case has been filed against the bank and unknown persons for money laundering.
Regardless of the criminal liability of its employees, the bank can be prosecuted if it failed to take all the organisational measures necessary to prevent infringement from occurring.
Depending on its evolution of the investigation, the process is also likely to extend to individuals suspected of participating in money laundering within the bank, according to a statement by the prosecutor’s office.
Public apology
On Sunday, chief executive Stuart Gulliver apologised for the Swiss branch’s past actions in an open letter. He claimed that the whole episode was a “painful experience” for the group.
“We must show we understand that the societies we serve expect more from us. We therefore offer our sincerest apologies,” stated the letter.
Gulliver also claimed that it no longer the same bank it was eight years ago.
“We have absolutely no appetite to do business with clients who are evading their taxes or who fail to meet our financial crime compliance standards,” stated the letter.
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HSBC apologises for Swiss branch’s past actions
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Under mounting pressure from the so-called Swissleaks revelations, HSBC boss apologised on Sunday for the role played by its Swiss branch in helping clients evade taxes eight years ago. The bank also claimed to have turned over a new leaf.
In an open letter addressed to HSBC customers, shareholders and colleagues, chief executive Stuart Gulliver apologised for the bank’s past actions. He claimed that the whole episode was a “painful experience” for the group.
“We must show we understand that the societies we serve expect more from us. We therefore offer our sincerest apologies,” stated the letter.
Sorry but…
However, the bank’s attempt to address the so-called Swissleaks revelations was far from a simple letter of apology. The bank stated that the media coverage of the data stolen by ex-employee Hervé Falciani must be put into context.
“Many of the people mentioned have no allegation of wrongdoing against them whatsoever but been named simply because they are well-known individuals,” the bank stated.
It also disputed the 100,000 clients figure mentioned in the media, claiming that the Swiss private banking arm only had 30,000 clients at its peak. In addition, HSBC questioned the accuracy of the stolen data suggesting that it could have been manipulated.
“It is unclear if the integrity of the data has been preserved, or even if the original data itself was complete and accurate. Recent allegations by a French law enforcement official in Nice, suggest that the data has been manipulated and could therefore contain material inaccuracies,” said another statement released by the bank.
Lesson learned?
HSBC also claimed that it no longer the same bank it was eight years ago.
“We have absolutely no appetite to do business with clients who are evading their taxes or who fail to meet our financial crime,” stated the letter.
The bank also released another statement showing the progress that has been made in overhauling the bank’s practices since 2007. It claims the latest figures show that it has “put compliance and tax transparency above profitability”. Measures stated include withdrawal from markets where due diligence is difficult and annual review of politically exposed persons.
The Swiss private bank has reduced the number of clients by almost a third, from 30,412 accounts in 2007 to 10,343 in 2014. It also slashed the amount of assets under management from $118.4 billion to $68 billion within the same period.
Tax evasion revelations deepen at HSBC’s Swiss arm
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The International Consortium of Investigative Journalists analysed the data taken from HSBC’s private banking arm by Hervé Falciani. It was originally passed onto the French government, but a report released on Sunday looked at a more detailed list of account holders. Clients included terror suspects, arms dealers, drug cartels and fugitive diamond merchants, alongside royal…
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Media, trade groups and regulators in Switzerland are asserting that HSBC Private Bank’s aiding of tax evaders has “primarily historical value”.
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