19.01.2018

HSBC: $100m fine to settle US forex investigation

400HSBC has agreed to pay just over $100m in penalties to settle a US Department of Justice probe into currency rigging. The payment comprises of $38.4m in restitution and a $63.1m fine, with the latter reflecting a 15pc reduction "in recognition of HSBC's cooperation during the investigation and its extensive remediation".

Investigations which have already found Mark Johnson, a former currency trading executives, guilty of front-running a client's trade. Another former executive, Stuart Scott, is currently fighting an attempt to extradite him to the US to face charges he denies.

HSBC said it had entered into a three-year deferred prosecution agreement (DPA), under which it would cooperate fully with regulatory and domestic and foreign law enforcement authorities in any investigations against itself or current and former employees.

In the settlement with the U.S. Department of Justice, HSBC also agreed to bolster its internal controls, and admitted and accepted responsibility for wrongdoing underlying two criminal wire fraud charges filed on Thursday against the bank, according to the agreement.

Deferred prosecution agreements let companies avoid criminal charges so long as they comply with the terms.

The latest DPA by the bank comes just over a month after a similar arrangement with the DoJ over money laundering charges ended after five years. The previous DPA started in 2012, when HSBC paid US authorities $1.9bn in fines.

HSBC has already paid millions in fines for misconduct in its foreign exchange operations. In November 2014 it paid £216m, alongside multiple other banks, to the UK's Financial Conduct Authority, along with $275m to the US Commodity Futures Trading Commission.

Last year HSBC also paid $175m to the US Federal Reserve "unsafe and unsound practices" in foreign exchange trading.






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