HSBC's Swiss Private Bank Says May Suffer "Significant" Fines From US Over Probe

Tom Burroughes

4 May 2012

HSBC’s Swiss private bank said fines and penalties linked to a US tax evasion investigation “could be significant” as it published figures showing clients outflows in the second half of last year.

The terms or timing of a resolution to the Department of Justice and Internal Revenue Service investigations cannot be determined at the present time, the Geneva-based HSBC Private Bank (Suisse) said in its annual report published on the firm’s website today.

The statement did not suggest an actual figure for any penalties it may suffer, however.

“HSBC Private Bank (Suisse) SA continues to cooperate, with due regard for Swiss law, in ongoing investigations by the US Department of Justice and the US Internal Revenue Service regarding whether HSBC Private Bank (Suisse) SA acted appropriately in relation to certain customers who had US tax reporting requirements,” the statement said.

“Based on the facts currently known, it is not practicable at this time for the group to determine the terms on which the ongoing investigation will be resolved, or the timing of such resolution, or for the group to estimate reliably the amounts or range of possible amounts of any fines and/or penalties which could be significant,” it said.

“HSBC Private Bank (Suisse) SA continues to cooperate, with due regard for Swiss law, with an investigation by the US Senate Permanent Subcommittee on Investigations relating to compliance with US tax and securities laws,” it said.

The statement comes as Switzerland and the US are seeking to resolve an investigation involving 11 Swiss financial firms after the US Department of Justice indicted Wegelin & Co in February for allegedly helping customers hide money from the IRS.