HSBC Hit With $12.5m US Charge for Not Registering Swiss Private Banking Arm

The Securities and Exchange Commission hit HSBC's Swiss-based private banking arm with a $12.5m charge because it had not been registered with the regulator before offering cross-border brokerage and investment advisory services to US clients.

The SEC said HSBC Private Bank had violated federal securities laws. The bank admitted its wrongdoing and agreed to pay the charge to settle the case.

"HSBC's Swiss private banking unit illegally conducted advisory or brokerage business with US customers," said Andrew J. Ceresney, director of the SEC's Division of Enforcement.

"HSBC Private Bank's efforts to prevent registration violations ultimately failed because their compliance initiatives were not effectively implemented or monitored."

The SEC revealed that HSBC Private Bank and its predecessors began providing services in the US for more than a decade and amassed 368 US client accounts and collected fees totalling around $5.7m.

This is the latest in a long lines of fines the bank has incurred over the last few years.

On 13 November, the UK's Financial Conduct Authority (FCA) and Commodity Futures Trading Commission (CFTC) fined five banks - Citibank, HSBC, JPM, the Royal Bank of Scotland (RBS) and UBS - a combined total of $3.4bn for their role in the manipulation of the foreign exchange market.

HSBC traders were among those operating in private chatrooms, transcripts from which were later described by the FCA as "[putting] their banks' interests ahead of those of their clients".

Comments like "lets double team em", "well done lads" and "yeah baby" litter discussions that at time appear to be exercises in back-slapping.