Hervé Falciani, who had worked for HSBC's Geneva private bank and who leaked information on clients and their tax affairs, was sentenced today but did not attend the trial and is based in France. 

“HSBC welcomes the decision of the Swiss Federal Criminal Court to sentence former IT employee Hervé Falciani to five years in prison for aggravated industrial espionage,” the bank said in a statement. 

“HSBC has always maintained that Falciani systematically stole clients’ information in order to sell it for his own personal financial gain. The court heard that he was not motivated by whistleblowing intentions and that this was not a victimless crime,” it continued.

HSBC disputed Falciani’s claim to be a whistleblower about undeclared accounts, claiming he tried to sell client account information for financial gain. The former employee’s leak of client account details has prompted a number of governments, such as those in the UK and France, to investigate. The bank has claimed that since 2008, it has sharply reduced the number of persons using accounts at the private bank, with a consequent cut in assets under management. It is understood that a large number of accounts affected by Falciani’s activities were closed more than a decade ago. The case also highlights the problem of how a person can raise questions about alleged wrongdoing in a bank when secrecy laws expressly forbid bankers from disclosing their clients’ identities.

The leak of client data and the media storm around it were embarrassing to the bank. HSBC’s group chief executive, Stuart Gulliver, took out full-page advertisements in the UK press earlier this year to apologise over the matter. The controversy broke shortly before the UK general election in May, when the issue of whether wealthy persons were avoiding or evading taxes was high on the public agenda.

Falciani may not serve any time in a Swiss prison because, as media reports said, France typically does not extradite its own citizens, and there are no legal proceedings against him in France.

Falciani's lawyer - Marc Henzelin - did not immediately respond to a request for a comment, according to Reuters.

The case has added to pressure on Switzerland’s bank secrecy laws, which make it a serious crime for bank employees to divulge information about their clients’ identities. A number of cross-border tax treaties between Switzerland and major industrialised nations are widely held to spell the practical demise of these laws, although they remain on the country’s statute books.

To see a recent editorial comment on bank secrecy in Switzerland, click here.