HSBC Swiss unit under probe in Lebanese fund embezzlement case – report

French prosecutors have placed HSBC's Swiss unit under preliminary charges over claims it assisted former Lebanese central bank governor Riad Salameh in the embezzlement of funds.

Le Monde first reported the action by French prosecutors against HSBC.

The Paris financial prosecutor's office said Europe's biggest bank is under investigation over suspected conspiracy to commit offences including misuse of public money, breach of trust and bribery of a public official.

Under the French system, preliminary charges indicate prosecutors consider there is sufficient evidence to expand the investigation under an examining magistrate.

The judge will later decide whether the case should go to trial or be dropped.

HSBC said last year that French and Swiss authorities were investigating its alleged role in money laundering connected to "two historical bank relationships". It said the effect of the investigations could be significant.

Soon afterwards, its private banking arm ended ties with more than 1,000 wealthy Middle Eastern clients, including customers from Saudi Arabia and Lebanon, reported Financial Times.

Swiss regulator Finma said in 2024 that it had identified serious failures in anti-money laundering controls linked to more than $300m in transactions between Switzerland and Lebanon and ordered a review of high-risk client relationships.

The watchdog began enforcement proceedings in 2021.

Switzerland's attorney-general has alleged that Salameh, who led Lebanon's central bank for three decades, and his brother Raja Salameh moved more than $300m from the institution to an HSBC Switzerland account held in the name of Forry Associates.

The transfers allegedly occurred between 2002 and 2015.

Investigators have alleged that hundreds of millions were then channelled from Forry to Swiss bank accounts controlled by the two brothers.

Finma opened enforcement proceedings against HSBC in connection with the Lebanese clients in 2021.

Salameh was charged by prosecutors in Beirut in 2022 with embezzling more than $330mn in public funds.

He has denied all allegations of wrongdoing and told the FT in 2021 that "my integrity has never been questioned. I have always earned my money legitimately".

He said he had built his wealth through his financial career before taking public office. Raja Salameh has previously denied wrongdoing.

https://finance.yahoo.com/markets/stocks/articles/hsbc-swiss-unit-under-probe-115845781.html