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Sep 30, 2017 @ 9:59

HSBC fined $175M for collusion, misuse of client’s confidential info

 

By Agence France-Presse

The US central bank on Friday fined global banking giant HSBC $175 million for failing to oversee foreign exchange traders who misused confidential client information and colluded with traders at competing banks.

Between 2008 and 2013, the bank failed to detect misconduct by senior traders, including its global head of foreign exchange cash trading, according the Federal Reserve.

Traders used “confidential inside information” to execute trades that benefited the bank but hurt a corporate client, conduct that resulted in traders’ federal indictment in New York on fraud charges.

An internal review by HSBC, which cooperated with authorities, also found traders attempted to manipulate foreign currency benchmark fixes and market prices generally by colluding with traders at other banks.

In an order, the Fed also directed HSBC to improve internal oversight measures and compliance with risk management requirements in its foreign exchange trading.

The enforcement action comes two months after the Fed also fined BNP Paribas $246 million over similar violations.
HSBC was one of six major US and European banks fined a total of $4.2 billion by global regulators in a November 2014 crackdown for attempted manipulation of the foreign exchange market.

The bank in 2012 paid $1.9 billion in fines and other charges after settling with US prosecutors over allegations it had deliberately moved money for drug cartels, clients tied to terrorist organizations and sanctions-barred countries, or failed to prevent this.

The agreement, due to expire this year, requires the bank to cooperate with US law enforcement and avoid further violations or risk seeing reinstated charges linked to money laundering. (AFP)

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