HSBC’s ‘Rotten’ Traders Accused of Gaining From Secret Info
Jonathan Browning, 14 June 2021
HSBC Holdings Plc faced accusations from an ex-client that its “rotten” traders used confidential information to make a profit, at the start of a London trial examining allegations of front running at the bank’s foreign exchange desk over 15 years ago.
The bank’s currency team deliberately traded ahead of client orders during a period far earlier than HSBC has previously admitted to, currency investment firm ECU Group Plc said. HSBC dismissed the claims as “incredibly stale.”
The trial will consider “a disgraceful period in HSBC’s history,” Richard Lissack, a lawyer for ECU said Monday, that serves as a “chronological prequel” to the episode regarding which the bank paid hundreds of millions of dollars to resolve investigations by U.K. and U.S. authorities.
The accusations come after the bank’s former global head of foreign exchange, Mark Johnson, was jailed for using his advance knowledge of a big client order to trade ahead of it. His deputy Stuart Scott successfully fought extradition to America after British judges ruled that much of the alleged misconduct took place in the U.K. ECU says HSBC manipulated rates between 2004 and 2006 that affected billions of dollars of orders.
