Jun 14, 2021

‘Rotten culture’ pervaded HSBC forex desk, High Court trial hears

A "Rotten culture" pervaded HSBC's foreign exchange trading desk between 2004 and 2006, with bankers misusing confidential information to "Front run" client orders, it was claimed to the High Court on Monday. The allegations were made at the start of a seven-week trial in which currency manager ECU Group has accused HSBC of fraud and misconduct relating to 52 forex trades it placed with the bank during that period. ECU first complained to HSBC about unusual FX price movements in February 2006 but was told, after an internal HSBC probe, that there was no evidence of wrongdoing. ECU began reviewing the trades again after 2016, when the US Department of Justice issued a formal indictment against two former HSBC FX traders relating to alleged front-running at the expense of another HSBC client - Cairn Energy. On Monday Richard Lissack QC, barrister for ECU, claimed to the High Court that the lawsuit related to a "Disgraceful episode" in HSBC's history.

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