HSBC bank under criminal investigation
April 9, 2015
HSBC has been placed "under formal criminal investigation by the French magistrates in connection with the conduct of HSBC's Swiss Private Bank in 2006 and 2007 for alleged tax-related offences" the bank said in a statement Thursday.
In addition, French authorities imposed 1 billion euros ($1.06 billion) bail to cover a potential fine, the British bank said, adding that the bail was "unwarranted and excessive."
The charges follow the so-called SwissLeaks scandal which drew media attention in February, after several international newspapers analyzed stolen data about clients and accounts provided by former HSBC employee, Herve Falciani.
The information indicated that the bank assisted over 120,000 clients in hiding 180.6 billion euros in order to avoid taxation. HSBC allegedly provided accounts to international criminals, corrupt businessmen, politicians and celebrities.
According to HSBC, Falciani had downloaded the data in late 2006 and early 2007.
HSBC vows defense
After the affair became public, the bank acknowledged that it had "sometimes failed to live up to the standards the societies we serve rightly expected from us."
However, the international banking giant said Thursday it would "defend itself vigorously in any future proceedings," and that the decision by French magistrates was "without legal basis."
HSBC's Swiss branch is currently under investigation in several European countries, including Spain and Belgium. Prosecutors in Geneva have also ordered an investigation into alleged money laundering.
French officials demanded 'fine'
According to AFP news agency, an official close to the case said last month that investigating magistrates had obtained evidence indicating HSBC "benefited from proceeds of financial fraud."
The Britain-based bank had also organized "the obscuring of financial flows, laundered funds of illicit origins, allowing thousands of clients holding large accounts to hide them from the French tax administration."
The formal charges follow the failure to reach a deal between prosecutors and the bank, which refused to pay the fine, according to a source close to the inquiry.
dj/kms (AFP, AP, Reuters, dpa)