09:13 AM EDT, 06/18/2024 (MT Newswires) -- (Updates with HSBC's ( HSBC ) comments in the fifth and sixth paragraphs.)

HSBC Holdings' ( HSBC ) Swiss unit HSBC Private Bank failed to prevent money laundering in connection with two "politically exposed" persons and "seriously violated" financial market law, Swiss Financial Market Supervisory Authority Finma said Tuesday.

The regulator said it ordered the bank not to enter into any new business relationships with politically exposed people until a review is conducted on all high-risk business relationships, including those with politically exposed people.

Finma said it found certain high-risk transactions worth over $300 million made between 2002 and 2015 that were insufficiently clarified and documented, making it impossible to determine whether these were legitimate. The funds, which originated from a government institution, were transferred from Lebanon to Switzerland and then flowed back to other accounts in Lebanon, according to Finma.

"At no time did the bank clarify why a transitory account held with it was used for these transactions," Finma said. "In its checks, the bank failed to recognize the indications of money laundering presented by these transactions."

A HSBC ( HSBC ) spokesperson told MT Newswires that the bank acknowledges "the matters raised by FINMA, which are historic."

"HSBC ( HSBC ) takes its Anti-Money Laundering obligations very seriously including complying with all laws and regulations in every market we operate in. As we plan to appeal the decision it would be inappropriate to comment further," the HSBC ( HSBC ) spokesperson said.

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