HSBC Fined HK$4.2 Million in Hong Kong, Cuts 1,000 Clients in Swiss Revamp

- HSBC fined HK$4.2 million ($537,683) for disclosure failures in Hong Kong. - HSBC's Swiss private bank removes over 1,000 Middle Eastern clients following anti-money laundering breaches. On August 26, 2025, HSBC faced heightened regulatory scrutiny over compliance failures in Hong Kong and Switzerland. In Hong Kong, the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority fined the bank HK$4.2 million ($537,683) for failing to disclose investment banking relationships in over 4,200 research reports issued between 2013 and 2021. According to Reuters on August 26, HSBC self-reported the issue, which the bank attributed to deficiencies in its data recording and mapping systems. In a statement, HSBC called the compliance gaps a "historic matter" and stated that it has addressed the problems by rectifying its controls and systems. This incident is not unprecedented in the region, as regulators have taken similar actions against other financial institutions, such as fining Credit Suisse HK$2.8 million in 2019. Earlier this year, Hang Seng Bank, which is majority-owned by HSBC, faced a HK$66.4 million penalty for overcharging clients and for misconduct in investment product sales. Meanwhile, HSBC’s Swiss private banking arm is making significant operational changes. Bloomberg reported on August 26 that the bank is cutting ties with over 1,000 wealthy clients from the Middle East. These clients, from countries including Saudi Arabia, Lebanon, Qatar, and Egypt, collectively hold over $100 million in assets. This move follows an investigation by the Swiss Financial Market Supervisory Authority (FINMA) that began in December 2021. The investigation revealed inadequate anti-money laundering controls at HSBC, specifically that the bank failed to conduct proper due diligence on two politically exposed persons (PEPs). This failure led to suspicious transactions of over $300 million between Lebanon and Switzerland from 2002 to 2015. As a result, FINMA has now prohibited HSBC's Swiss unit from working with new PEPs until the bank completes a thorough review of its high-risk relationships. The bank also remains under investigation in Switzerland and France for alleged money laundering linked to historical cases.