Another day, another banking scandal…
The Swiss private banking unit of HSBC Holdings plc (NYSE:HSBC) (LON:HSBA) has been accused of tax fraud by authorities in Belgium, according to the New York Times’ DealBook.
According to the report, HSBC’s Swiss private banking unit allegedly helped more than 1,000 wealthy clients particularly in the Antwerp diamond industry to avoid paying taxes on assets worth “hundreds of millions of euros.”
The ExodusPoint Partners International Fund returned 0.36% for May, bringing its year-to-date return to 3.31% in a year that's been particularly challenging for most hedge funds, pushing many into the red. Macroeconomic factors continued to weigh on the market, resulting in significant intra-month volatility for May, although risk assets generally ended the month flat. Macro Read More
Allegations against HSBC Private Bank NV/SA
HSBC Private Bank NV/SA has been charged with serious and organized tax fraud, money laundering and unlawful exercise of the profession of financial intermediary by the investigating magistrate judge, according to the statement released by the prosecutors’ office in Brussels.
The prosecutors stated that the investigation against HSBC’s Swiss private banking unit involves transactions that happened from 2003 to present. The judge alleged that the British Bank encouraged its wealthy clients to establish companies overseas including Panama and Virgin Islands—the main purpose is to hide their assets.
On Monday, HSBC Holdings plc (ADR) (NYSE:HSBC) (NYSE:HSBA) confirmed that it received a notice that’s its Swiss private banking unit is under a “formal investigation” by a judge in Belgium, who was examining whether the bank acted appropriately in the past in connection with certain clients.
HSBC Holdings plc (ADR) (NYSE:HSBC) (NYSE:HSBA) also revealed that its Swiss private banking unit is also under investigation by a magistrate judge in France on allegations that it helped clients avoid paying taxes.
“Both the Belgian and French investigations have been notified in our filings previously and we will continue to cooperate to the fullest extent possible,” according to the statement of HSBC Holdings plc (ADR) (NYSE:HSBC) (NYSE:HSBA).
The magistrate judge in Belgium will question several employees and executives of HSBC Holdings plc (ADR) (NYSE:HSBC) (NYSE:HSBA) during the next phase of the investigation, according to prosecutors.
HSBC Holdings plc (ADR) (NYSE:HSBC) (NYSE:HSBA) is the largest bank in Europe in terms of market value. Early this month, the bank allocated $378 million to cover a potential fine from UK regulators in connection with allegations on currency market manipulation.
In 2012, the bank agreed to pay $1.92 billion in penalty to settle the money laundering case filed against it by U.S. regulators.