HSBC share price: Senior exec arrested over forex fraud charges
HSBC Holdings’ (LON:HSBA) head of global foreign exchange cash trading has been arrested by US authorities and charged with fraud for currency trades, the Financial Times has reported. The news comes after it emerged last week that the Asia-focused lender had escaped money-laundering charges in the US in 2012 following an intervention by former Chancellor of the Exchequer George Osborne and the UK banking regulator.
HSBC’s share price has been subdued in today’s session, having fallen 0.51 percent to stand at 492.60p as of 10:30 BST. The decline is largely in line with losses in the broader London market, with the benchmark FTSE 100 index having shed 0.37 percent to 6,703.77 points. The lender’s shares have lost just under 16 percent of their value over the past year, and are down by some eight percent in the year-to-date.
The FT reported yesterday that the US attorney’s office in Brooklyn in New York had filed a complaint against Mark Johnson, HSBC’s global head of forex cash trading, claiming that he, along with Stuart Scott, the bank’s former head of foreign exchange cash trading for Europe, the Middle East and Africa, had used privileged information to execute trades which benefitted the Asia-focused lender. Prosecutors allege that the duo caused a $3.5-billion purchase of UK pounds, executed to the benefit of the bank, and at the expense of an unnamed ‘victim company’.
The arrest comes after a report suggested last week that former Chancellor George Osborne and Financial Services Authority officials had intervened in 2012 to warn that prosecuting Europe’s biggest bank could lead to a “global financial disaster”. HSBC, which at the time was accused of letting drug cartels use US banks to launder funds, paid a $1.92-billion (£1.48 billion) settlement but did not face criminal charges. A person familiar with the matter told the Wall Street Journal yesterday that the crimes alleged this week predated that settlement and were unlikely to affect it.
As of 10:47 BST, Thursday, 21 July, HSBC Holdings plc share price is 492.60p.
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