March 3, 2015 / 5:40 PM / 5 years ago

Swiss party criticises prosecutor, regulator over handling of HSBC

ZURICH, March 3 (Reuters) - Switzerland’s Social Democratic Party wants a parliamentary debate about a scandal surrounding HSBC’s Swiss bank and has accused the country’s financial regulator and attorney general of doing too little to pursue criminals using offshore accounts.

HSBC has admitted failings in compliance and controls in its Swiss private bank after media allegations that it may have enabled clients to conceal millions of dollars of assets. Europe’s largest bank has apologised to customers and investors over the previous failings of its Swiss business and has said the operation has since been overhauled.

The Social Democratic Party on Tuesday accused Switzerland’s attorney general of looking the other way on alleged wrongdoing at HSBC, and said that financial watchdog FINMA did not have the necessary resources to pursue alleged criminal schemes.

Geneva’s public prosecutor searched HSBC’s lakeside Swiss office nearly two weeks ago as part of a criminal inquiry into allegations of aggravated money laundering.

The SP said HSBC affair was a blemish on Switzerland’s financial centre. “Such a scandal cannot happen again,” the party said in a statement.

A spokesman for FINMA had no comment. A spokeswoman for the attorney general said it had not yet received indication of a crime that would require federal, as opposed to cantonal, prosecution.

The SP called for an interbank warning system for suspected criminal funds between Switzerland’s 300-odd banks, and criticised the attorney general, which has concentrated prosecutorial efforts on pursuing whistleblower Herve Falciani, a former IT employee at HSBC.

“More than five years after this scandal first emerged, the attorney general is still absorbed with bringing whistleblower Herve Falciani to trial,” the SP said.

Falciani told Swiss television last month that he was willing to return to Switzerland to stand trial for leaking confidential client data if he was given assurances that he would not face immediate arrest.

The SP’s demands come nearly two weeks after a parliamentary committee said it would question FINMA about HSBC’s Swiss bank, which the regulator said it had first investigated as long as four years ago.

Last month, FINMA revealed that two previously undisclosed investigations had found that HSBC violated money laundering guidelines. The regulator said it had ordered remedial measures, which HSBC implemented.

It also emerged on Tuesday that the chief executive of HSBC and the former head of its private bank have been called to testify before a British parliamentary committee next week, the second such panel to question HSBC executives about the scandal. (Reporting By Katharina Bart. Editing by Jane Merriman)

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