HSBC exec charged with fraud
Mark Johnson, a big HSBC executive, has been charged with fraud in the USA, along with a former colleague called Stuart Scott.
Johnson, HSBC's global head of foreign exchange trading, was arrested after being accused of using insider information to make money off a currency deal, say the US Department of Justice (DoJ).
HSBC are fully cooperating with the authorities, but won't make a statement regarding ongoing litigation.
The DoJ has accused the traders of "front-running", which basically means misusing information to make money on the value of currency. The pair have been accused of using this info which was provided by a client who was planning on converting $3.5bn into British pounds.
The claim says that the execs knew that such a massive transaction would push the value of the currency up, so they could make money by buying sterling before the order was handled.
"The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves," said the US Attorney Robert Capers.
The DoJ reckon that HSBC raked in around $8m profit from such trades.
"It was advantageous to them and HSBC, and disadvantageous to the victim company, to execute the victim company foreign exchange transaction" says the DoJ.
Thus far, four banks have pleaded guilty to conspiring to manipulate the foreign exchange market.
Now, HSBC were not part of the criminal cases, but were fined by UK and American regulators over their traders attempted manhandling of Forex rates.