HSBC has been fined a record 40 million Swiss francs (£27.8m) by the Geneva authorities for “organisational deficiencies” which allowed money laundering to take place in the bank’s Swiss subsidiary.
Announcing the biggest fine ever imposed by Geneva’s authorities, the city’s chief prosecutor, Olivier Jornot, launched a stinging attack against his own country’s financial laws.
“This matter shows the weakness of Swiss law in the matter of entry of criminal funds into the financial system,” claimed Jornot.
Geneva has agreed to close the investigation against HSBC in return for the financial settlement, but Jornot warned the bank was on its final warning, saying: “This is an excuse which will only apply once.”
The probe into “suspected aggravated money laundering” was prompted, Jornot said, by revelations in the Guardian, the BBC, Le Monde and other media coordinated by the International Consortium of Investigative Journalists. This showed that HSBC’s Swiss banking arm turned a blind eye to illegal activities of arms dealers and helped wealthy people evade taxes.
On 18 February, Jornot ordered a raid on HSBC’s Geneva offices, a day after Switzerland’s federal prosecutor, Michael Lauber, had told the press there was no call for a probe into wrongdoing at the bank. Lauber had had argued it was not appropriate for the state to launch an investigation into HSBC based on stolen data.
In a statement HSBC said: “The investigation conducted by the public prosecutor of the canton of Geneva into HSBC Private Bank (Suisse) SA (‘the Bank’) has been formally closed today. The investigation found that neither the bank nor its employees are suspected of any current criminal offences.
“The Geneva prosecutor acknowledges the progress the bank has made in recent years, including the improvements in its compliance function, internal processes and technology.”
This article was written by Juliette Garside, for theguardian.com on Thursday 4th June 2015 14.18 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010