Published: Fri, January 19, 2018
Money | By Armando Alvarado

HSBC agrees to pay $101m fine to settle United States currency rigging probe

HSBC agrees to pay $101m fine to settle United States currency rigging probe

HSBC will pay $101.5m (£73m) to settle a United States investigation into currency rate-rigging, it announced this evening.

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

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.

The payment comprises of $38.4m in restitution and a $63.1m fine, with the latter reflecting a 15 per cent reduction "in recognition of HSBC's cooperation during the investigation and its extensive remediation".

HSBC said on Friday it will take steps to improve its Global Markets compliance programme and internal control, as well as cooperate with regulatory and law enforcement authorities.

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In the settlement, HSBC also agreed to bolster its internal controls, and admitted and accepted responsibility for wrongdoing underlying two criminal wire fraud charges filed against the bank. Johnson and his former colleague Stuart Scott, HSBC's European head of foreign exchange trading in London until December 2014, allegedly pocketed $3m in profit and also billed their client $5m in fees for their work. A separate settlement was paid to Cairn Energy for $8 million.

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

The latest sanctions came a month after HSBC was freed from a five-year DPA for alleged lapses in money-laundering controls and for enabling transactions for customers in countries barred by U.S. sanctions.

It is not the first time HSBC has been in trouble with United States authorities.

HSBC was one of six major U.S. and European banks that were fined a total US$4.2 billion by global regulators in a November 2014 crackdown for attempted manipulation of the foreign exchange market.

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