HSBC has Agreed to Pay $101.5 Million to Resolve Fraud Charges
HSBC Holdings has agreed to pay $101.5 million to resolve fraud charges with the US Department of Justice (DoJ). The agreement to pay $101.5 million comprised of $63.1 million criminal penalty and $38.4 million in disgorgement and restitution to resolve charges in defrauding two bank clients through a multi-million dollar scheme commonly referred to as “front-running.”
“ HSBC to Pay $101.5 Million for Defrauding Clients “
On two separate occasions in 2010 and 2011, foreign exchange traders misused confidential information provided to them by HSBC clients to execute multi-billion dollar foreign exchange transactions involving the British Pound Sterling. After executing confidentiality agreements with clients, the traders transacted in the Pound Sterling in their HSBC “proprietary” accounts, thereafter causing the large transactions to be executed in a manner designed to drive the price of the Pound Sterling in a direction that benefited HSBC, and disadvantaged clients.
In one incident, HSBC had made misrepresentations to one of the clients, Cairn Energy, so as to conceal its actions. In total, HSBC admitted to making profits of approximately $38.4 million on the first transaction in March 2010, and approximately $8 million on the Cairn Energy transaction in December 2011.
Since 2011, HSBC has introduced numerous measures to enhance its Global Markets compliance programme and internal controls and agreed to cooperate fully with regulatory and law enforcement authorities.
HSBC is one of the world’s largest banking and financial services organisations. With around 6,000 offices in both established and emerging markets, we aim to be where the growth is, connecting customers to opportunities, enabling businesses to thrive and economies to prosper, and, ultimately, helping people to fulfil their hopes and realise their ambitions.
We serve more than 47 million customers through our four Global Businesses: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. Our network covers 71 countries and territories in Europe, Asia, the Middle East and Africa, North America and Latin America. Listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by about213,000 shareholders in 132 countries and territories.
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