HSBC share price up, Swiss offices raided by authorities

HSBC Holdings Plcs private bank offices were searched by authorities on Wednesday as a part of an investigation over allegations of money laundering.

Genevas public prosecutor said in a statement that it have launched an investigation in relation to the recent “public disclosures”.

The raid began early on Wednesday and it was led by Attorney General Olivier Jornot and the prosecutor Yves Bertossa.

“We are looking for everything and anything we can find,” the prosecutor said, adding that it was looking into allegations of “aggravated money laundering”.

The criminal investigation would also extend to individuals who were related to the process of money laundering, the statement said.

Earlier this month HSBCs Switzerland arm was accused of helping wealthy clients avoid taxes and also aiding criminals launder money.

A report issued by an international news organization showed that Europes largest bank by assets illegally serviced 100 000 clients spread across 200 countries, ranging from rock stars and tax evaders to arms dealers and blood diamond merchants.

The report was based on a client information that a former HSBC computer expert stole from the bank in 2008.

“We have co-operated continuously with the Swiss authorities since first becoming aware of the data theft in 2008 and we continue to co-operate.” HSBC said in a statement released on Wednesday.

Last year HSBC said it had lifted its compliance employees to 6 000 from 1 500 and was spending $1 billion, double the previous amount, on helping authorities.

Since the information leak the bank has been trying to clear up its reputation. It admitted to have knowledge of “clients that may not have fully met their applicable tax obligations” and said it had undergone significant change over the past several years, including abandoning clients who do not “meet the strict new HSBC standards.”

Over the weekend British papers published a letter from HSBCs Chief Executive Stuart Gulliver, who offered his “sincerest apologies”.

HSBC is also facing criminal investigations in the US, Belgium, Argentina and France.

In late 2012 HSBC agreed to pay nearly $2 billion in fines to US authorities for processing drug money out of Mexico and also transferring funds from sanctioned countries, including Iran.

HSBC gained 0.28% on Tuesday and closed at GBX 602.80 in London. On Wednesday the stock gained 0.83% to GBX 607.82 at 13:35 GMT, marking a one-year decrease of 7.39%. The company is valued at £115.89 billion.