The US Securities and Exchange Commission said HSBC began providing cross border advisory and brokerage services in the US more than 10 years ago, amassing 368 clients.
But its employees had travelled to the US at least 40 times to solicit clients and provide investment advice without being registered, collecting fees of approximately $5.7m (€4.7m, £3.6m), the SEC said.
The relationship managers also communicated directly with clients in the US through overseas mail and emails.
In 2010, HSBC Private Bank decided to exit the US cross-border business, and nearly all of its US client accounts were closed or transferred by the end of 2011.
Andrew Ceresney, director of the SEC’s division of enforcement said HSBC’s Swiss private banking unit “illegally conducted advisory or brokerage business with US customers” and that the bank’s “efforts to prevent registration violations ultimately failed because its compliance initiatives were not effectively implemented or monitored”.
HSBC has agreed to admit wrongdoing and pay the fine to settle the charges.
It was also announced yesterday that Credit Suisse will have to pay fines and costs totalling $2.6bn to US authorities for operating an illegal cross-border banking business that helped thousands of American clients evade tax.
