US prosecutor mulls new assault on HSBC

HSBC could face criminal charges in the US over the work of its foreign exchange bankers, sources claimed today.

The US Justice Department charged foreign exchange traders Mark Johnson and Stuart Scott at the London-headquartered bank in July, over allegations they made $8 million in profits and fees by “front running” a client’s $3.5 billion foreign exchange trade. Johnson pleaded not guilty.

This came as the bank remains on effective probation by US prosecutors, who signed a “deferred prosecution agreement” with HSBC in 2012 as it paid almost $2 billion to settle allegations of anti-money-laundering failures.

A report compiled for US senators at the time revealed how HSBC’s work had left the US exposed to Mexican drugs cartels, as subsidiaries cleared suspicious travellers’ cheques.

HSBC was allowed to strike a DPA. Now, however, lawmakers are considering whether the bank should face fresh disciplinary action over concerns that it has failed to follow through on demands for reform, according to Bloomberg.

HSBC declined to comment. One source dismissed the claims, proposing even if the bank’s forex traders are found guilty of criminal charges, HSBC had not been accused of a criminal act so the DPA would not be breached.