20 Jan HSBC to pay over $100 million for cheating clients
Europe’s biggest bank is coughing up cash yet again over its past misdeeds.
HSBC is paying a total of $101.5 million to end a criminal case in the United States in which the bank stood accused of using currency trades to swindle its own customers out of tens of millions of dollars.
“The company misused confidential client information for its own profit on more than one occasion,” said John Cronan, an acting assistant attorney general at the U.S. Justice Department.
“This sort of misconduct not only harmed their clients, costing the victims money, but it also ran a serious risk of undermining the public’s confidence in our financial markets.”
HSBC ( bankers executed trades in a way that drove up costs for two big corporate clients, )according to the Justice Department. The scheme netted the bank more than $46 million in profits in 2010 and 2011.
Bank employees traded the British pound just before executing big transactions for the clients in a way aimed at moving the currency in a direction that would benefit HSBC and hurt the clients, according to U.S. prosecutors.
HSBC has agreed to pay a $63.1 million criminal fine and also $38.4 million in restitution for one of the companies it defrauded. The company in question wasn’t identified by the Justice Department or HSBC.
The bank previously paid $8 million to settle with the other client, Cairn Energy (. )
One of the ex-bankers involved, Mark Johnson, has already been found guilty of conspiracy and wire fraud. The former head of foreign exchange cash trading at HSBC faces up to 20 years in federal prison.
HSBC “is responsible for the conduct of its employees” and “must not be permitted to benefit from the fraud committed by bank personnel,” said Inspector General Jay Lerner of the Federal Deposit Insurance Corporation.
HSBC said in a statement that it has taken a number of measures since 2011 to improve how its global markets business is run. It said it has agreed with U.S. prosecutors to take further steps to beef up its compliance program and internal controls.
The deal with the Justice Department is the latest costly settlement for HSBC.
CNNMoney (Hong Kong) First published January 19, 2018: 5:08 AM ET