HSBC to pay $43 million Geneva money laundering settlement

Thu Jun 4, 2015 11:29am EDT
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By Joshua Franklin and Stephanie Nebehay

ZURICH/GENEVA (Reuters) - HSBC (HSBA.L: Quote) agreed on Thursday to pay Geneva authorities 40 million Swiss francs ($43 million) to settle a money laundering investigation at its Swiss private bank, one of a number of probes facing its Geneva-based wealth manager.

Leaked files published earlier this year sparked allegations that HSBC's private bank may have enabled clients to conceal millions of dollars of assets and dragged Europe's largest lender into the sights of regulators including Geneva's public prosecutor.

Following four months of inquiries, Geneva authorities said they had closed their investigation after HSBC agreed to pay 40 million francs for wrongdoing, the largest such figure imposed by local prosecutors.

"HSBC for several years suffered organisational deficiencies in the fight against money laundering," Geneva's chief prosecutor Yves Bertossa told a news conference.

Its business handling Mediterranean and Israel-based funds was at the heart of the investigation which focused on four clients after documents were seized, he said, giving no details.

Olivier Jornot, Geneva's attorney-general, told reporters: "This affair shows the weakness of Swiss law in fighting the entry of criminal funds into the financial circuit."

"It's easy to ask public prosecutors afterwards to carry out titanic investigations. But on the other hand when we have a law that practically doesn't punish intermediaries accepting money of dubious origin, there is a problem."

A source close to the case said that the Geneva authorities decision to reach a settlement was based on "judicial realpolitik".   Continued...

A HSBC logo is pictured behind the flag of the canton of Geneva at a Swiss branch of the bank in Geneva February 18, 2015.   REUTERS/Denis Balibouse