Data theft hits 24,000 HSBC clients
By Haig Simonian in Zurich and Sharlene Goff in London
Published: March 11 2010 09:25 | Last updated: March 11 2010 20:25
An ex-employee of HSBC stole the details of 24,000 clients from a branch in Switzerland, in a hugely embarrassing theft of data for which the bank apologised unreservedly on Thursday.
Europe’s biggest bank revealed that Hervé Falciani, a former computer specialist who fled to France, had stolen the details from its Geneva private bank three years ago. Some 15,000 of the accounts were still active, HSBC said. The rest were closed.
Finma, the Swiss financial markets regulator, has launched an investigation into the theft. It will examine how so much data could have been stolen and whether HSBC’s response had met legal requirements.
Chris Meares, HSBC’s head of global private banking, said that such investigations were “normal procedure” and that the bank was working closely with the regulator.
The breach, which affected 15 per cent of HSBC’s total private client base, will come as a serious blow to the reputation of the bank.
The theft will also heighten concerns about client confidentiality in Switzerland and Liechtenstein, which have strict bank secrecy. HSBC said that the stolen information was limited to accounts in Switzerland. “We deeply regret the situation and unreservedly apologise to our clients for this threat to their privacy,” said Alexandre Zeller, head of HSBC’s Swiss private bank.
Swiss banks vs the world
The Swiss banking system has been under increasing pressure over offshore clients
● US: US steps up legal fight on UBS clients
● Italy: Italian police in tax raid on Swiss banks
● France: Paris admits use of bank details
● Germany: Merkel prepares for Swiss ire over bank data
● UK: London moves to buy stolen bank data
Mr Falciani’s actions have strained Franco-Swiss relations, amid fears in Bern that the French authorities could use the stolen data to detect tax evaders and pass on details to other countries.
HSBC said the French had informed the Swiss authorities that the data they held would not be used inappropriately.
HSBC said the stolen information was limited to accounts in Switzerland and confirmed that no data had been compromised for clients with accounts elsewhere. It did not believe the stolen data have allowed or would allow any third party to access any client account.
Mr Falciani has admitted stealing the information and handing it to French tax authorities, though he denies receiving payment. He also tried to sell the information to Lebanese banks before he was caught.
The bank had originally played down the theft, revealed last December, saying that fewer than 10 clients were involved. Mr Zeller said that the statement was based on information from the Swiss federal prosecutor, which acted after a tip-off from a Lebanese bank.
Mr Falciani had gained access to the data while on a project to transfer HSBC’s customer database to a more secure system.
The bank said it has made significant improvements to its security, spending more than SFr100m ($93m) to upgrade systems and improve security.
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