HSBC, Credit Suisse Sacrifice Staff To Placate US, Lawyers Say

Swiss banks are turning over thousands of employee names to US authorities as they seek leniency for their alleged role in helping American clients evade taxes, according to lawyers representing banking staff. At least five banks supplied e-mails and telephone records containing as many as 10,000 names to the US Department of Justice, according to estimates by Douglas Hornung, a Geneva-based lawyer representing 40 current and former employees of HSBC Holdings Plc (HSBA) ' s Swiss unit, Credit Suisse Group AG (CSGN) and Julius Baer Group Ltd. (BAER) The data handover is illegal, said Alec Reymond, a former president of the Geneva Bar Association, who is representing two Credit Suisse staff. "The banks are burning their own people to try and cut deals with the DoJ," said Hornung. "This violation of personal privacy is unprecedented in the Swiss banking industry." Swiss banks want to settle a US tax-evasion probe after the DoJ indicted Wegelin & Co. on Feb. 2 for allegedly helping customers hide money from the Internal Revenue Service. Credit Suisse, HSBC and Julius Baer, ​​which have said they expect to pay fines to resolve the tax matter, are handing over data to mollify the US, according to Hornung. Credit Suisse said the Swiss government authorized the delivery of staff names and that the "large majority" of employees have nothing to fear. Julius Baer and Zuercher Kantonalbank also said they received authorization. HSBC said it has delivered documents and is cooperating with the US Cold-Blooded Swiss banks, the biggest managers of offshore wealth, have seen secrecy erode since UBS AG (UBSN) admitted in 2009 to fostering tax evasion and paid a fine of $ 780 million to avoid prosecution. Switzerland's largest wealth manager later turned over data on about 4,700 accounts to the IRS. While Swiss companies are usually prohibited from sending evidence to assist foreign legal proceedings, the country's governing Federal Council authorized an exemption in April at the request of an undisclosed number of banks.