HSBC leaker Falciani detained in Spain at demand of Switzerland

In this file photo taken on October 28, 2015 Herve Falciani, the former HSBC employee who leaked documents alleging the bank helped clients evade millions of dollars in taxes, gestures as he gives a press conference in Divonne-les Bains. (AFP)
Updated 04 April 2018
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HSBC leaker Falciani detained in Spain at demand of Switzerland

MADRID: Spanish police on Wednesday detained Herve Falciani, a former computer analyst at the Swiss branch of HSBC who leaked documents alleging the bank helped clients evade millions of dollars in taxes, a police source said.
“He was arrested in Madrid, in the street on the way to a conference,” a top police official told AFP, adding the arrest was made at the request of Switzerland, which is seeking his extradition.
The official did not say why Falciani, a French-Italian national, was wanted by Switzerland.
A Swiss court in 2015 convicted Falciani of aggravated industrial espionage and handed him a five-year prison sentence.
He did not attend his trial and has avoided Switzerland since.
Falciani leaked a cache of documents allegedly indicating that HSBC’s Swiss private banking arm helped more than 120,000 clients to hide 180.6 billion euros ($222 billion) from tax authorities, sparking the so-called “Swissleaks” scandal.
While he is widely viewed as a whistleblower and hailed as a hero in countries where his leaked information is helping catch tax cheats, Swiss authorities prosecuted him for data theft, industrial espionage, and violating the country’s long-cherished banking secrecy laws.
“It is very regrettable that he was arrested, we don’t understand it,” the president of Spain’s tax inspectors union Gestha, Carlos Cruzado, told AFP, adding he witnessed Falciani’s detention as he arrived at a university to speak at a conference.
“The paradox is that he was detained at the entrance to a debate on the need to protect whistleblowers and his chair was left empty. We were going to debate the fact that Spain is one of the European countries where fewer measures have been implemented to protect whistleblowers,” Cruzado said.

Falciani became an IT worker for HSBC in 2000 and moved to the bank’s offices in Geneva in 2006.
The so-called “Snowden of tax evasion” and “the man who terrifies the rich” then obtained access to a massive database of encrypted customer information.
He took the client list in 2007 and went to Lebanon with his mistress the next year planning to sell the data. Swiss authorities described it as “cashing in.”
Yet suspicious bankers in Lebanon were not interested in buying the dubiously sourced client list and at least one tipped off their Swiss counterparts to Falciani’s activities.
Falciani then got in contact with European fiscal authorities and began passing them the pilfered information, which subsequently led to the prosecution of tax evaders including Arlette Ricci, heir to France’s Nina Ricci perfume empire, and the pursuit of Emilio Botin, the late chairman of the Spanish bank Santander.
He rejects that he was only seeking financial gain, insisting he had wanted to expose how banks support tax evasion and money laundering.

Falciani, 46, was arrested in Barcelona in July 2012 on an international warrant seeking his extradition to Switzerland after he arrived by boat from the port of Sete in France.
He then spent a couple of months in a Spanish prison.
In 2013, Spain’s High Court ruled against extraditing Falciani on the grounds that the charges he faced in Switzerland are not considered crimes under Spanish law.
In an interview with top-selling Spanish daily El Pais in 2013, Falciani said that about a month before he fled to Spain, US justice officials who he was collaborating with from Paris warned him his life was at risk.
“I had two options: start a new life in the United States or travel somewhere else to gain time. They told me that the only safe place in Europe would be Spain, which had used my information with success in important cases,” he told the newspaper.


As worries about populism in Europe rise, investors bet on stock market volatility

Updated 5 min 40 sec ago
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As worries about populism in Europe rise, investors bet on stock market volatility

  • More than 350 million EU citizens will head to the polls between May 23 and 26 to elect a new Parliament
  • The vote will shape the future of the bloc amid a backlash against immigration and years of austerity

LONDON: Investors are betting on heightened political uncertainty and greater volatility in European stock markets ahead of European Parliament elections in May amid growing concerns about rising populism.
In one of the first concrete signs in financial markets that investors are bracing for political instability, VSTOXX futures , which reflect investor sentiment and economic uncertainty, have jumped in recent weeks.
While the classic gauge of fear — known as implied volatility, which tracks demand for options in European stocks — is currently at 15.68, futures that bet on the same thing over the coming months show a pronounced jump.
That’s because investors have piled on trades that bet on big swings in stocks as election day nears.
Implied volatility for futures contracts expiring in May show a pronounced jump to 16.8, compared with 15.35 in April. The contracts measure the 30-day implied volatility of the euro zone STOXX 50 index.
“We are seeing a bit of a kink around May when we have European elections and we have this wave of populism,” said Edmund Shing, head of equities and derivatives strategy at BNP Paribas.

Looming elections
More than 350 million EU citizens will head to the polls between May 23 and 26 to elect a new Parliament, a vote that will shape the future of the bloc amid a backlash against immigration and years of austerity.
Mainstream center-left and center-right lawmakers may lose control of the legislature for the first time, as euroskeptic and far-right candidates build support.
Herve Guyon, Societe Generale’s head of European equity derivatives flow strategy and solutions, said the rise of populism had triggered a recent flurry of speculative trades.
“Political uncertainty might be coming from the EU rather than the United States. We’ve seen investors doing very large trades to benefit from an increase in volatility around these events,” he said.
“We as a bank don’t expect the elections to be a massive game-changer. The populists won’t get enough to disrupt the political system, but we do note some investors did take some positions on this event.”
The implied volatility is still well below levels seen in late 2018 when global stock markets were routed amid worries about rising interest rates, slowing economic growth and the trade war between Beijing and Washington.
In late December, it shot to above 26, its highest since February.
But the flurry of activity suggests investors are seeking out new opportunities after a slide in implied volatility across major asset classes.
Edward Park, deputy chief investment officer at asset manager Brooks MacDonald, said some of the activity may also be due to persistent uncertainty about Britain’s exit from the European Union as the Brexit date of March 29 nears.
This year, volatility across currency, fixed income and stocks markets has plunged as the US Federal Reserve and European Central Bank have taken dovish policy stances.
The Deutsche Bank currency volatility indicator hit multi-year lows this week, while the proxy for fixed income volatility is languishing at all-time lows.
In stocks, the Cboe volatility index, Wall Street’s so-called “fear gauge,” fell to its weakest in six months this week.
“There’s been a cross-asset volatility crash — in euro-dollar, US rates and equities — in the aftermath of (ECB President Mario) Draghi’s and (Fed Chairman Jerome) Powell’s comments and the expectation of lower rates for longer,” said Guyon.