HSBC Employee Stole Data on 15,000 Swiss Accounts

British banking giant HSBC Holdings Plc said on Thursday that account data from 15,000 Swiss bank customers were stolen by a former employee.

A former employee, widely reported to be Herve Falciani, stolen details on 15,000 existing bank accounts at HSBC Private Bank, based in Geneva. The bank did not explicitly identify the name of the employee, but Bloomberg confirmed that Falciani was an information technology officer at the bank.

The former employee stole the information between 2006 and 2007 from 24,000 accounts, but 9,000 of the accounts have been closed since then, leaving 15,000 existing customer accounts at risk from the information theft. HSBC did not confirm the issue until earlier this month, after authorities from the Swiss Federal Prosecutor passed information to the bank.

"We deeply regret this situation and unreservedly apologize to our clients for this threat to their privacy," said Alexandre Zeller, CEO of HSBC Private Bank (Suisse) SA in a statement. "We are determined to protect our clients’ interests and are taking every necessary measure to do so, actively contacting all our clients with Swiss-based accounts."

The extent of the damage is currently unknown. MarketWatch cited an anonymous individual that the employee may have attempted to sell confidential account information to individuals in Lebanon.

HSBC began contacting customers this week to apologize and it does not believe the stolen data would allow any individual access to account information. Since the discovery of the theft, HSBC said it has spent more than 100 million Swiss francs ($93 million) to upgrade its IT security.

“This is enormous and no-one expected that it could happen to HSBC so it’s a tough lesson for the whole industry,” Bernhard Bauhofer, founder of Sparring Partners GmbH, said in an interview with Bloomberg.

Under Fire

Swiss banks came under fire recently for their roles in allegedly withholding tax information on foreign account holders. Last year, Swiss banking giant UBS AG agreed to hand over certain account information of U.S. account holders to the U.S. Internal Revenue Service (IRS). The IRS suspects that individuals have used Swiss bank accounts to withhold information on earnings and engage in tax evasion.

The stolen account info could become a thorny issue for nations such as France and Germany, which in the past has attempted to obtain account information to target tax evaders. French authorities on Thursday said that if they come across any stolen info, they would not use the data inappropriately.

For their part, Swiss banking authorities have said this week that they would not respond to any account questions based on stolen account information, referring to inquiries from foreign nations on tax matters.

“The bank is cooperating with the Swiss authorities and continues its own investigations, and a criminal investigation led by the Swiss Federal Prosecutor is underway,” HSBC said. The Swiss banking regulator, known as FINMA, will investigate the breaches that caused the theft, as well as how HSBC has attempted to improve its security following the incident.

HSBC is Europe’s largest bank by assets, and its Swiss banking arm manages the assets of wealthy individuals across the world.