Saturday, February 21, 2015

HSBC Holdings Plc (HSBA.L) faces investigation by U.S. authorities

HSBC Tower, the international headquarters for...
HSBC Tower, the international headquarters for HSBC Holdings plc in Canary Wharf, London. Photo taken in 2005. (Photo credit: Wikipedia)
HSBC Holdings Plc (HSBA.L) faces investigation by U.S. authorities and an inquiry by British lawmakers after admitting failings by its Swiss private bank that may have allowed some customers to dodge taxes.
U.S. prosecutors have stepped up efforts to establish whether HSBC, the world's second largest bank, helped Americans evade taxes after media reports said the bank had helped wealthy customers conceal millions of dollars of assets.
U.S. authorities are also probing whether HSBC manipulated currency rates, and a U.S. law enforcement official said on Monday the investigations could prompt the Department of Justice to revisit a 2012 deferred prosecution agreement with the bank.
The agreement was part of a $1.9 billion settlement that allowed HSBC to avoid criminal charges after it was found to have helped move hundreds of millions of dollars in illicit drug money through the U.S. financial system.
"It is quite possible that the (agreement) may be reopened as a result of the bank's activities on either or both the tax evasion and foreign exchange manipulation front," said the U.S. law enforcement official, who requested anonymity because the investigations are ongoing.
British lawmakers said they plan to open an inquiry into the bank after it came under fire for its past practices in Switzerland.
HSBC shares fell 2 percent by 0845 GMT on Tuesday, underperforming the European bank index .SX7P. They fell 1.6 percent on Monday after media reports about the activities of its Swiss operation based on client data from 2006-07.

A spokesman for HSBC declined further comment on Tuesday after the bank issued a statement late on Sunday in response to the media reports.
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