Politics

HSBC's Swiss Branch Concealed $100 Billion In Client Accounts

| by Edward Arnold
HSBC Bank.HSBC Bank.

British bank HSBC Holdings reportedly used its private Swiss branch to conceal the identities of account holders and help depositors hide billions of dollars in assets.

An investigation by the International Consortium of Investigative Journalists revealed secret documents showing how HSBC employees would reassure clients they would not disclose the details of their accounts to the governments of their home countries.

Reuters claims the client list includes soccer and tennis professionals, musicians and actors. Morocco's King Mohammed, politicians, executives, dictators and arms dealers were also mentioned.

The consortium's report was based on documents stolen by a former HSBC employee in 2007. HSBC has responded to recent reports of fraud, admitting to its banking failures.

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“We have taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards, including those where we had concerns in relation to tax compliance,” HSBC said in a statement. “We have also refocused our Swiss private bank on clients from strategic markets of the group, such as owners and principals of the group's commercial banking clients. As a result of this repositioning, HSBC's Swiss private bank has reduced its client base by almost 70 percent since 2007.”

The New York Times reported that tax authorities in Britain, France and Spain have recovered more than 500 million euros in taxes from individuals.

The investigation recorded more than 100,000 clients from more than 200 countries. More than $100 billion in account holdings included $13.4 billion from customers in  the U.S.

As of 2 p.m. EST on Feb, 9, HSBC's stock price had fallen more than 1.5 percent.

Sources: CNN Money, Reuters, New York Times / Photo Credit: Gyver Chang via Flickr