Jersey regulator to probe HSBC

JERSEY Tue Nov 13, 2012 11:22pm IST

A man uses a mobile phone in a branch of HSBC in St Helier, Jersey November 12, 2012. REUTERS/Stefan Wermuth

A man uses a mobile phone in a branch of HSBC in St Helier, Jersey November 12, 2012.

Credit: Reuters/Stefan Wermuth

Related Topics

Stocks

   

JERSEY (Reuters) - Jersey's financial watchdog is to probe anti-money laundering systems and controls at HSBC, following a report that Europe's biggest bank was harbouring money for convicted criminals.

Britain's Daily Telegraph newspaper said on Friday it had been handed leaked data that identified 4,388 British-based people holding 699 million pounds in current accounts, including celebrities and bankers.

Jersey's Financial Services Commission said on Tuesday it was to investigate "the matters raised by the press, including how the misappropriation of data occurred".

While HSBC has refused to confirm the authenticity of the leaked client data for confidentiality reasons, the report has left Jersey's financial services sector - a critical component of the island's economy - facing a severe image crisis.

London-listed HSBC, conducting its own investigation into the circumstances surrounding the alleged leak, has agreed to co-operate, the Commission said.

Antonio Simoes, appointed deputy chief executive of HSBC Bank Plc and head of its British bank in November, was in Jersey on Sunday and Monday to meet the regulator and kickstart the banks' own probe.

Last week, HSBC said probes by the United States into anti-money laundering failures in its international operations could result in a fine of more than $1.5 billion.

"BASHED"

The regulator and Jersey residents told Reuters they were frustrated about insinuations in the press before the facts of the case were clear.

"We get bashed all the time. It is aggravating because a lot of time and effort goes into regulating," Barry Faudemer, director of enforcement at the Jersey Financial Services Commission, told Reuters.

Geoff Cook, chief executive of lobby group Jersey Financial, said he was more concerned about the implications for loss of privacy enjoyed by account holders rather than the allegations of money-laundering failures.

"The breach of data was unhelpful for Jersey, but not damaging because this is not a systemic issue," he said.

The commission has set up an anonymous whistleblowing telephone line to help collect information that will identify regulatory misconduct.

Jersey politician Geoff Southern said: "It is absolutely vital for the reputation of the island that they do a thorough investigation and that the results are made public in the widest sense. It is no good saying that you have got the best regulation in the world if you cannot show it". (Writing by Sinead Cruise and Chris Vellacott; Editing by Dan Lalor)

FILED UNDER:

Economic Pulse

Reuters Showcase

S&P on Budget

S&P on Budget

Budget shows commitment to keep fiscal deficit low  Full Article | On Ratings 

PMI Data

PMI Data

Factory activity growth slows to five-month low in Feb  Full Article 

Fitch on Budget

Fitch on Budget

India's "less aspiring" fiscal consolidation strategy negative for ratings  Full Article 

Monetary Policy

Monetary Policy

Two policymakers see case for RBI rate cut - report  Full Article 

China Economy

China Economy

China Feb HSBC PMI at seven-month high but more rate cuts seen on the cards  Full Article 

Battling Apple

Battling Apple

Samsung unveils sleek new Galaxy phones  Full Article 

Moody's on Budget

Moody's on Budget

Budget "credit neutral" from a ratings perspective  Full Article 

On Rate Hike

On Rate Hike

Insight: Near Fed majority backs June liftoff Yellen hasn't yet endorsed  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage