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* HSBC says past practices no longer acceptable
* Whistleblower says leaks are "tip of iceberg"
* Issue seen eating up HSBC management time (Adds comments from UK lawmaker, Falciani, analyst)
By Steve Slater
LONDON, Feb 10 (Reuters) - The head of HSBC's private bank has told staff past practices that may have allowedsome clients to dodge taxes are unacceptable, with the companyfacing pressure on both sides of the Atlantic over its conduct.
HSBC this week admitted failings in compliance and controlsin its Swiss private bank and faces investigation by U.S.authorities and an inquiry by British lawmakers after mediareports said it helped wealthy customers conceal millions ofdollars of assets in a period up to 2007.
Adding to HSBC's discomfort, British Business SecretaryVince Cable questioned how quickly its Swiss business stoppedsuch practices, saying he was troubled by claims they "may havecontinued much more recently".
HSBC has been in the spotlight after the media publishedallegations based on information supplied by Herve Falciani, aformer employee of the bank.
Details that have emerged on the HSBC Swiss bank accountholders were only "the tip of the iceberg," Falciani told Frenchdaily Le Parisien on Tuesday. Tax authorities have had access tomuch more data than media, he added.
The reports have renewed scrutiny on the world's secondbiggest bank, which was fined $1.9 billion two years ago by U.S.authorities for lax controls that allowed criminals to laundermoney. It was also hit with a $618 million penalty by regulatorsin November for alleged manipulation of currency markets.
HSBC and Swiss-based banks have been under fire for helpingclients avoid taxes for several years. HSBC said past compliancemeasures and controls failed, but said its Swiss business hadsince been "transformed" and client accounts had been closed.
It sought to drive home that message to its staff.
"The practices and the banking model of that time are nolonger acceptable," Peter Boyles, chief executive of HSBC'sGlobal Private Banking since December 2012, said in a memo.
"Our clients want to know that we have changed and the pastpractices they read about in the papers have no place in ourmodern private bank," a person familiar with the contents ofBoyles' memo told Reuters.
Boyles told staff the bank had "absolutely no appetite" todo business with people who are evading taxes.
GULLIVER'S TROUBLES
The issue adds to headaches from the past for HSBC ChiefExecutive Stuart Gulliver, who took over four years ago andadmitted to lawmakers in February 2013 that HSBC's structure"was not fit for purpose for a modern world".
HSBC has been criticised as being too big and complex, andhad a structure that put too much power in the hands of countryheads and not enough in central command.
Gulliver has said a restructuring he implemented in 2011 mayhave appeared trivial to outsiders but it was the biggestorganisational change in the firm since it was founded in 1865.
A risk for Gulliver is that the U.S. Department of Justicere-opens its 2012 deferred prosecution agreement with HSBC,which could stiffen penalties or sanctions on it.
Chirantan Barua, analyst at Bernstein, said the mostdamaging impact could be on management time and resources.
"If you were to find lapses in the system in the last yearStuart (Gulliver) would be in serious trouble, but none of thisyou can blame on him."
HSBC shares dipped 1.7 percent on Tuesday.
One British lawmaker said the issue showed that bankingstill needed further reform after the financial crisis.
"Clearly much more still needs to be done," said AndrewTyrie, the head of a panel of UK politicians who watch overfinancial issues.
"The spirit may be willing - particularly at the top - butthe flesh remains weak," Tyrie added.
(Additional reporting by Huw Jones and Andrew Osborn in Londonand Ingrid Melander in Paris; Editing by Alexander Smith andKeith Weir)
