Data theft hit 24,000 Swiss HSBC accounts

HSBC has admitted that details of some 24,000 Swiss client accounts – including those of British-based customers – were stolen by a former employee in what will be seen as a massive breach of trust by its private banking operation.

The UK-headquartered banking giant first said in December that it believed the theft had affected "less than ten clients".

But in a statement issued yesterday, it upped that tally to about 15,000 active accounts, representing roughly 15 per cent of all of its current Swiss bank clients.

"The theft, which was perpetuated by a former IT employee about three years ago, involved approximately 15,000 existing clients who had accounts with the bank in Switzerland before October 2006," the statement said.

However, at a news conference later in the day, HSBC said an additional 9,000 accounts that had since been closed were also affected by the security breach.

Many of those who have left the bank did not have large enough amounts to warrant a wealth management account, HSBC said.

The Geneva-based private banking operation has an international clientele, so wealthy investors from around the world face the possibility of coming under investigation for tax evasion in their home countries.

The former IT employee said to have stolen the data – Frenchman Herve Falciani – has already given some of the data to French authorities in exchange for police protection and to prevent his return to Switzerland, where authorities want to prosecute him.

HSBC apologised for what it described as a "serious" data breach, but added it did not believe the stolen data would allow third parties to access client accounts.

"We deeply regret this situation and unreservedly apologise to our clients for this threat to their privacy," Alexandre Zeller, chief executive of HSBC Private Bank, said. "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."

HSBC first learned of the data breach in December 2008. Falciani is thought to have accessed the account details while working as a technical analyst during a data migration carried out from the end of 2006 into 2007.

Falciani fled to France while under investigation in Switzerland. Authorities in France subsequently seized the data with an eye towards tracking down citizens who were avoiding French taxes by hiding money in offshore accounts.

HSBC said yesterday that it had invested more than 62 million to upgrade and improve the security of its data systems since it became aware of the breach.

A spokesman for the bank said any UK-based clients worried about their Swiss accounts should contact their personal relationship manager.