Four months after the Geneva prosecutor’s office made a big noise by raiding HSBC’s Swiss arm as part of an investigation into “aggravated money laundering”, the case has ended not with a bang but with a whimper. It is true that the bank will make a payment of about £28m, and that is a record of sorts, but the penalty is being structured as “compensation” and there is no admission of guilt.
Neither the Swiss regulator, the Financial Market Supervisory Authority (Finma), nor the federal prosecutor are planning to take any action about the issues raised by the Geneva team, so HSBC has, in effect, got off with the equivalent of a slapped wrist. That record penalty amounts to little more than a rounding error when set against the profits it makes every quarter.
Authorities in France, Belgium and the US are all at various stages of investigations into allegations that the bank’s Swiss unit helped its wealthy clients to evade tax in the wake of the data that was spirited out of the country by whistleblower Hervé Falciani. But that is not illegal in Switzerland, hence the line of attack taken by the Geneva team which had alleged that the bank also helped some of those same clients to launder the proceeds of terrorism, drugs and arms trafficking. Such allegations are notoriously difficult to prove and will now remain unproven thanks to the settlement.
HSBC has, of course, issued a statement piously declaring that it co-operated fully with Swiss investigators and has been making sweeping changes to its Swiss operations – as if that somehow makes everything that has emerged about what was going on there all fine and dandy.
This dog could yet bark again. The prosecutors were at pains to point out that, while the case against HSBC may be over, the same stipulation doesn’t apply to former employees. If they get hauled in, HSBC may take a further hit in terms of reputational damage.
But here’s where the Geneva prosecutors deserve credit. Despite taking on Godzilla with a pop gun, they still achieved some sort of result. It may ultimately look like small potatoes when the Americans, the French and the Belgians are finished with this affair – but a result it is. Which is more than any agency in this country has achieved, or appears likely to achieve.Reuse content