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Top traders charged with conspiracy and fraud regarding a $3.5 billion foreign exchange deal Two top traders employed by HSBC have been charged with conspiracy and fraud regarding a $3.5 billion foreign exchange deal.

26 July 2016

Two top traders employed by HSBC have been charged with conspiracy and fraud regarding a $3.5 billion foreign exchange deal.

Mark Johnson, HSBC’s head of forex cash trading, and Stuart Scott, formerly the bank’s head of forex cash trading for Europe, the Middle East and Africa, are accused of fraudulently rigging a $3.5 billion currency trade they were arranging for a client.

Since they were charged in the US, it has emerged that HSBC conducted its own investigation two years ago into the deal and found nothing wrong with it. The bank is now reviewing that investigation.

What needs to be discovered is the basis for the deal being given a clean bill of health two years ago. It begs the question, how thorough was the internal investigation? And did the bank realise the potential damage the deal could cause to its reputation?

Having carried out internal investigations for many companies, it will be interesting to see the full details - and how US prosecutors’ interpretations differ from those of the internal investigators.


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