Nov. 25 (Bloomberg) -- HSBC Holdings Plc will pay $12.5 million to settle claims that its Swiss private-banking unit solicited U.S. investors without being properly registered.
HSBC Private Bank Suisse SA provided brokerage services without registering with the Securities and Exchange Commission, the agency said in a statement today. The bank admitted wrongdoing as part of the agreement.
“HSBC Private Bank’s efforts to prevent registration violations ultimately failed because their compliance initiatives were not effectively implemented or monitored,” SEC Enforcement Director Andrew Ceresney said in a statement.
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The bank began providing cross-border services in the U.S. more than 10 years ago, amassing as many as 368 U.S. client accounts and collecting about $5.7 million in fees, the SEC said. HSBC employees traveled to the U.S. to solicit clients and provide investment advice.
HSBC’s Swiss unit exited the U.S. cross-border business in 2010 and nearly all of its U.S. client accounts were closed or transferred by the end of 2011, according to the SEC.
Harry Weiss, an attorney for HSBC, didn’t immediately return a message seeking comment.
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