The U.K. Financial Services Authority on Monday slapped HSBC Holdings PLC with the biggest retail fine to date after the regulator found the bank sold unsuitable products to elderly customers.
HSBC must pay $16.3 million in a fine and a further $45.7 million to compensate customers who were advised to buy investment bonds that often matured later than the buyer's life expectancy.
Up to 2,485 customers who bought the investments between 2005 and 2010 may have received poor advice based on their individual circumstances, the FSA said.
HSBC first identified the problems in 2009 and reported them to the FSA. Without the bank's cooperation, the fine would have been 30% more.
Brian Robertson, the chief executive of HSBC Bank PLC, said the incident "runs contrary to everything that we stand for."
"We are undertaking a full review of the advice given to impacted customers and I can guarantee that every customer who is found to have not been treated fairly will not be disadvantaged," he said.
An HSBC spokesman said the issue involved only a small number of advisors who were not employed by the company.