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HSBC Faces $1.5 Billion Fines If Global Probe Finds Abuses

Josh O'Neill

22 February 2018

could face fines exceeding $1.5 billion if multiple cross-jurisdictional probes find its Swiss private banking unit helped clients evade taxes. 

Authorities in the US, Belgium, Argentina, India, Spain and elsewhere are investigating allegations of tax evasion or tax fraud, money laundering and unlawful cross-border banking solicitation at HSBC’s private bank in the Alpine State, it said in its annual report earlier this week. Less than fourth months ago, HSBC paid the French government $370 million to resolve claims that it helped native clients hide assets from French tax authorities. 

The London/Hong Kong-listed lender has been dogged by a string of criminal investigations. Last month, it shelled out $100 million to the US Department of Justice (DoJ) to sweep under the carpet a case alleging it had rigged clients’ currency transactions. At the time, HSBC had just been released from a five-year deferred prosecution agreement with the DoJ for helping Mexican drug cartels wash dirty cash and breaching international sanctions in doing business with Iran. 

Stuart Gulliver, chief executive, who is to step down after seven years at the helm, said the bank had moved on from the mistakes of the past.

"We have implemented global standards and financial controls to the highest levels," Gulliver said. "HSBC is in a stronger and better position today to protect itself from bad actors than we were in 2010."