The largest bank in Europe HSBC Holdings Plcs private-banking arm has been linked to helping wealthy clients around the world avoid millions of taxes.
Hervé Falciani, a former IT expert at HSBCs Swiss operations, has leaked secret documents, stolen in 2007, to several news organizations which outline ties between the bank and international criminals.
According to news reports the information revealed that HSBCs private-banking division provided secret accounts to an array of clients, ranging from rock stars and tax evaders to arms dealers and blood diamond merchants.
The leaked data includes the names of around 100 000 clients spread across 200 countries, with more than 7 000 in Britain.
Additionally, the reports claim that HSBC also distributed among its Swiss clients tax avoiding strategies while also providing guidance on how to execute them.
HSBC said in a statement that its Swiss division and other private banks had customers who “took advantage of bank secrecy to hold undeclared accounts”, which resulted in “a number of clients that may not have fully met their applicable tax obligations.”
However, it said it had taken “significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards”, including clients who were using their Swiss accounts to avoid taxes at home. As an outcome from these actions the customer base of its HSBCs Swiss arm shrunk by 70% since 2008.
In late 2012 HSBC agreed to pay nearly $2 billion in fines to US authorities for processing drug money out of Mexico and also transferred funds from sanctioned countries including Iran. The agreement also included a five-year period, during which HSBCs US banking license could be revoked if bank engages in any unlawful activities.
HSBC is under investigation in France and Belgium for allegedly helping its clients to evade taxes. Last year UBS paid €1.1 billion after French judges found it guilty of aiding wealthy clients hide money from the government.
Additionally, in 2014 HSBC was accused of similar activities from Argentinian officials. The bank allegedly provided tax-evading services to more than 4 000 citizens.
Chief Executive Franco Morra restated today that the bank has undergone a series of modifications to its operations in order to “prevent its services from being used to evade taxes or launder money,” adding that “the old business model of Swiss private banking is no longer acceptable.”
HSBC gained 1.21% on Friday and closed at GBX 620.80 in London. On Monday the stock fell 2.17% to GBX 607.30 at 13:09 GMT, marking a one-year decrease of 3.24%. The company is valued at £119.31 billion.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
