View more on these topics

HSBC execs charged in forex probe

HSBC-700x450.jpg

Two HSBC foreign exchange traders have been charged with fraud after making $8m (£6m) in profits and fees by “front running” a $3.5bn foreign exchange trade for a UK listed oil and gas company.

A statement from the US Department for Justice says UK citizens Mark Johnson, HSBC global head of forex cash trading, and Stuart Scott, who was head of forex cash trading for Europe, the Middle East and Africa until leaving HSBC in 2014, were both charged.

Johnson was arrested on 19 July at John F Kennedy Airport in New York while a warrant has been issued for Scott’s arrest. The FT reports Johnson was later released.

The Department of Justice alleges the two traders deliberately bought sterling ahead of an unnamed client’s – understood to be Cairn Energy – $3.5bn purchase of the currency before reselling it back to them at a higher price.

According to the FT, US authorities allege the traders used a technique called “ramping” which causes the price of a currency to spike and ultimately benefits the bank’s books.

The Department of Justice alleges the traders made $3m in profits in their own trading book and that HSBC received $5m in improper fees.

The FCA is understood to be waiting for any criminal action against Scott and Johnson to conclude before taking any regulatory action.

Recommended

Money-Cash-Coins-GBP-Pounds-UK-700x450.jpg
1

SFO drops forex investigation due to lack of evidence

The Serious Fraud Office has closed its criminal investigation into foreign exchange market fraud due to “insufficient evidence”. Following a referral from the FCA, the SFO began investigating “fraudulent conduct” in the forex market in July 2014. The investigation was carried out over one and a half years and covered over half a million documents. […]

HSBC-Branch-Building-700x450.jpg

Osborne blocked HSBC prosecution in money laundering probe

The Chancellor George Osborne and the FSA intervened in US investigations that could have seen HSBC prosecuted for money laundering. A US Congressional investigation published yesterday, claims the regulator “hampered the US government’s investigations” and “influenced” the decision not to prosecute Britain’s biggest bank, Sky News reports. The report adds: “George Osborne, Chancellor of the […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. And the reason the US authorities are involved is ?????
    If memory serves correctly Cairn Energy is a UK co. and the people involved are presumably UK citizens.
    Did the trading take place in the US? If not then the US should not be involved.

Leave a comment