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HSBC to pay over $100 million for cheating clients

20 January 2018
HSBC to pay over $100 million for cheating clients

The bank has got agreed to pay nearly $100 million in penalties to settle down a U.S. Justice Department investigation into the wrong manipulation of currency rates.

"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". The deal has to be ratified by a USA court but if approved would allow Europe's biggest lender to avoid criminal charges.

The DoJ's investigation concerned the misuse of confidential information provided to the bank by clients for its own profit in 2010 and 2011. The complaint filed in U.S. District Court in Brooklyn said two HSBC bankers on.

Investigations which have already found Mark Johnson, a former currency trading executives, guilty of front-running a client's trade. The company in question wasn't identified by the Justice Department or HSBC.

The settlement included $38.4m (£27.5) in restitution and a $63.1m (£45.2) fine, reflecting a 15 per cent reduction in recognition of the bank's cooperation during the investigation and its "extensive remediation", HSBC said in a statement today (19 January).

The bank previously paid $8 million to settle with the other client, Cairn Energy. "HSBC is committed to ensuring fair outcomes for our customers and protecting the orderly and transparent operation of the markets", spokesman Rob Sherman said in an email. The former head of foreign exchange cash trading at HSBC faces up to 20 years in federal prison.

The earlier cases were regarding antitrust law over conduct disturbing an entire market, however the HSBC case was related to a fraud done with its own clients.

The deal with the Justice Department is the latest costly settlement for HSBC.

The Department reached this resolution based on a number of factors, including the approximately $46.4 million that HSBC gained from the offense; the bank's remedial measures to date, including dedicating significant resources to improving its systems and controls and terminating the employment of employees involved in wrongdoing; and the bank's commitment to continuing to enhance its compliance program and internal controls.