HSBC Private Bank has stopped
offering wealth management services to US residents from offices
outside the US.

HSBC’s announcement comes as US
authorities ramp up their investigation of foreign banks’ tax
advice to US residents with offshore accounts.

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HSBC discounted any link between
closing its offshore US business and the increased regulatory
scrutiny.

 

Clients better served by US
bankers: HSBC

The world’s fifth largest wealth
manager said that US clients would be better served by its private
banking teams in the US.

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In a letter sent to its US clients
earlier this month, HSBC said that it will terminate “private
banking services to US persons and certain trusts and non-operating
companies connected to US persons”.

HSBC gave its US-based clients a
month to close their existing offshore accounts.

US regulators are continuing to
apply pressure to both wealth managers and clients over tax
transparency.

 

Regulators charge
ex-bankers

Last month, Credit Suisse confirmed US authorities were
investigating cross-border private banking services to US
citizens.

In the past month, the US
Department of Justice (DoJ) has successfully convicted several
former UBS bankers of helping clients evade paying income taxes by
opening and maintaining secret Swiss bank accounts.

Three Credit Suisse bankers were
charged with conspiracy, including its former head of North America
offshore banking in July.

The DoJ investigations will be
given added impetus when the second Offshore Voluntary Disclosure
Initiative (OVDI) closes on 31 August.

The OVDI offers reduced fines for
US residents who voluntarily disclose secret offshore accounts.

The first OVDI in 2009 led to 15,000 voluntary disclosures by US
taxpayers in that effort covering banks in more than 60
countries.