Jul 27, 2021
HSBC accused of ‘blatant and indefensible’ forex fraud by ex-client
London-based currency traders at HSBC would routinely front run client orders in a bid to make extra profits as part of a "Blatant and indefensible" fraud, lawyers for currency manager ECU Group claimed at London's High Court. ECU Group alleges that FX traders at HSBC misused confidential information about its trades and used them for their own profit between 2004 and 2006, pinpointing 52 transactions in that period. Richard Lissack QC, counsel for ECU, said his client had "Smoking gun evidence" that currency traders at HSBC "Widely and routinely" tried to profit from client orders, pointing to a chat hosted on the Bloomberg terminal between Stuart Scott, HSBC's head of cash FX in Europe, and Paul Mischenko, head of FX for the Americas, from January 2010. Lissack also noted that in January 2018, HSBC admitted to US authorities that Scott and Mark Johnson, another senior ex-staffer at the bank, fraudulently traded ahead of their client in 2011 and subsequently attempted to conceal their actions. "It is a blatant and indefensible admission of fraud by one of the most senior foreign exchange traders at HSBC at the time," Lissack added.
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