French Prosecutors Said to Recommend HSBC Face Trial in Tax Case

(Bloomberg) -- French prosecutors are recommending that HSBC Holdings Plc face a criminal trial over allegations it helped clients evade taxes following a probe where the bank was initially ordered to post a 1 billion-euro ($1.1 billion) bail to cover a potential penalty, according to a person familiar with the matter.

Investigative judges will have the final say in the matter after France's financial prosecutor issued final recommendations in the case, said the person who asked not to be identified as the status of the probe is confidential. Prosecutors accused HSBC of aggravated laundering of proceeds of tax fraud and conspiring to illicitly solicit clients on French territory, the person said.

French prosecutors recommended the bank's Swiss arm, HSBC Private Bank Suisse SA, answer charges in court, the person said.

HSBC said in a statement the bank will continue to defend itself “vigorously.”

French radio station France Inter reported the prosecutors' recommendations earlier on Thursday.

France began scrutinizing HSBC's Swiss private bank after Herve Falciani, a former information technology worker at the firm, stole client account details from HSBC's Geneva office in 2008 and passed them to the French government. The Swiss unit was charged in 2014.

Last year, HSBC was also charged by French prosecutors regarding its private bank's conduct in 2006 and 2007 and simultaneously ordered to pay a 1 billion-euro bail. Later in 2015, a French court reduced HSBC's bail to 100 million euros.

Two managers at HSBC Private Bank Suisse should also face trial, according to French prosecutors, the person said.

To contact the reporter on this story: Gaspard Sebag in Paris at gsebag@bloomberg.net. To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Peter Chapman, Neil Callanan