09-04-2015, 03:49 PM
LONDON The British bank HSBC said on Thursday that it had been placed under formal criminal investigation by French magistrates examining whether its Swiss private bank assisted wealthy clients to avoid taxes.
Investigating magistrates in France have been conducting an inquiry into whether HSBC Private Bank (Suisse) helped individuals avoid their tax-reporting requirements from 2006 to 2007.
In November, the Swiss private banking unit was separately placed under formal investigation. France's financial prosecutor's office recommended in March that HSBC's Swiss operation be criminally charged with encouraging tax evasion.
The Swiss private banking unit also is facing criminal charges in Belgium.
On Thursday, HSBC said it was notified the day before that the parent company was also placed under formal investigation, and it was ordered to post a bail of 1 billion euros, or about $1.08 billion.
The bank said the magistrates' decision was "without legal basis" and the bail was "unwarranted and excessive."
HSBC "intends to appeal and will defend itself vigorously in any future proceedings," the bank said in a news release on Thursday.
HSBC shares rose 2.3 percent, to 600.30 pence, or about $8.93, in afternoon trading in London on Thursday.
The formal investigation is the latest blow to HSBC's reputation after disclosures about the actions of its Swiss private banking arm.
HSBC apologized in February after news reports, based on secret documents taken from the bank in 2007, showed that its employees had reassured clients that the lender would not disclose details of their accounts to the tax authorities of their home countries and discussed options to avoid paying taxes on those assets.
The bank has acknowledged previous "conduct and compliance failures" in its Swiss business and has said that it has overhauled its private banking business and reduced its client base in Switzerland by 70 percent since its peak.
"We have absolutely no appetite to do business with customers that are evading taxes," Stuart Gulliver, chief executive of HSBC, said in a call with reporters when the bank reported its earnings in February.
Mr. Gulliver himself has been forced to defend his use of a shell company in the past to channel his bonus into a Swiss account, which he closed in 2009. He has previously said it was not intended to avoid taxes and was common for employees in Hong Kong, where he worked at the time, to do so to keep their compensation private.
HSBC acquired the Swiss business in 1999 through the takeover of Republic New York and Safra Republic Holdings.
In addition to the French and Belgium inquiries, HSBC is facing tax investigations over its Swiss unit in Argentina and in Switzerland.
In November, HSBC agreed to settle an investigation by the Securities and Exchange Commission regarding how its Swiss private banking unit had solicited and provided advice to American clients, with the unit paying a $12.5 million fine and admitting wrongdoing.
http://www.nytimes.com/2015/04/10/busine....html?_r=1
Investigating magistrates in France have been conducting an inquiry into whether HSBC Private Bank (Suisse) helped individuals avoid their tax-reporting requirements from 2006 to 2007.
In November, the Swiss private banking unit was separately placed under formal investigation. France's financial prosecutor's office recommended in March that HSBC's Swiss operation be criminally charged with encouraging tax evasion.
The Swiss private banking unit also is facing criminal charges in Belgium.
On Thursday, HSBC said it was notified the day before that the parent company was also placed under formal investigation, and it was ordered to post a bail of 1 billion euros, or about $1.08 billion.
The bank said the magistrates' decision was "without legal basis" and the bail was "unwarranted and excessive."
HSBC "intends to appeal and will defend itself vigorously in any future proceedings," the bank said in a news release on Thursday.
HSBC shares rose 2.3 percent, to 600.30 pence, or about $8.93, in afternoon trading in London on Thursday.
The formal investigation is the latest blow to HSBC's reputation after disclosures about the actions of its Swiss private banking arm.
HSBC apologized in February after news reports, based on secret documents taken from the bank in 2007, showed that its employees had reassured clients that the lender would not disclose details of their accounts to the tax authorities of their home countries and discussed options to avoid paying taxes on those assets.
The bank has acknowledged previous "conduct and compliance failures" in its Swiss business and has said that it has overhauled its private banking business and reduced its client base in Switzerland by 70 percent since its peak.
"We have absolutely no appetite to do business with customers that are evading taxes," Stuart Gulliver, chief executive of HSBC, said in a call with reporters when the bank reported its earnings in February.
Mr. Gulliver himself has been forced to defend his use of a shell company in the past to channel his bonus into a Swiss account, which he closed in 2009. He has previously said it was not intended to avoid taxes and was common for employees in Hong Kong, where he worked at the time, to do so to keep their compensation private.
HSBC acquired the Swiss business in 1999 through the takeover of Republic New York and Safra Republic Holdings.
In addition to the French and Belgium inquiries, HSBC is facing tax investigations over its Swiss unit in Argentina and in Switzerland.
In November, HSBC agreed to settle an investigation by the Securities and Exchange Commission regarding how its Swiss private banking unit had solicited and provided advice to American clients, with the unit paying a $12.5 million fine and admitting wrongdoing.
http://www.nytimes.com/2015/04/10/busine....html?_r=1
"The philosophers have only interpreted the world, in various ways. The point, however, is to change it." Karl Marx
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"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.