HSBC pays $100m to settle USA fraud case

Ivan Schwartz
January 20, 2018

HSBC has agreed to pay $101.5m (£73m) to settle a U.S. criminal investigation into the rigging of currency transactions.

"This sort of misconduct not only harmed their clients, costing the victims money, but it also ran a serious risk of undermining the public's confidence in our financial markets", Cronan said.

Europe's biggest bank is coughing up cash yet again over its past misdeeds.

In one March 2010 transaction, it converted approximately GBP5.3 billion ($7.4 billion) to USA dollars for a client - identified in court documents only as a financial-services company - that resulted in a $38.4 million profit for HSBC. The scheme netted the bank more than $46 million in profits in 2010 and 2011.

Investigations which have already found Mark Johnson, a former currency trading executives, guilty of front-running a client's trade.

United Kingdom-based HSBC agreed to pay a $63.1 million criminal penalty and $38.4 million in disgorgement and restitution to settle charges contained in a two-count criminal information alleging wire fraud. The company in question wasn't identified by the Justice Department or HSBC.

British citizen who at the time of his arrest was HSBC's global head of foreign exchange cash trading exits following a hearing at the U.S. Federal Court in Brooklyn New York
Image Mark Johnson has protested his innocence

The $100 million that bank settled to pay is lower than criminal penalties paid by other worldwide banks nearly three years earlier for misconduct over the operation of currency markets.

"Today's agreement represents that the financial services company, HSBC Holdings, is responsible for the conduct of its employees, and that it must not be permitted to benefit from the fraud committed by bank personnel", said Inspector General Lerner.

The settlement follows an indictment handed down Wednesday against a former Barclays trader similarly accused of defrauding the former California computing giant Hewlett-Packard by manipulating foreign exchange markets.

As part of the deal the UK's largest bank by assets will enter into a three-year deferred prosecution agreement (DPA) with the US Department of Justice, resolving its probe into conduct in the lender's global markets business during 2010 and 2011, HSBC said in a statement.

"Since then, HSBC has introduced a number of measures created to make the control environment in its Global Markets business more robust".

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