HSBC to pay $101.5m to settle currency rigging probe


HSBC saw one of its former bankers convicted a year ago in connection with the probe.

HSBC will pay $101.5m (£73m) to settle a United States investigation into currency rate-rigging, it announced this evening.

The case, brought against the UK-based bank by the Department of Justice in NY, centred on the activities of traders accused of using confidential information provided by clients to the benefit of the bank.

Mark Johnson was found guilty of defrauding client Cairn Energy in a 2011 currency trade.

United Kingdom-based HSBC agreed to pay a $63.1 million criminal penalty and $38.4 million in disgorgement and restitution to settle charges contained in a two-count criminal information alleging wire fraud.

He is awaiting sentencing while Cairn received an $8.1m payment from HSBC in settlement.

HSBC will also take "additional steps to enhance its global markets compliance programme and internal controls" as well as cooperating fully with regulators and law enforcement.

Since this recent controversy and run in with the U.S. authorities, the lender has promised to boost its compliance programme and internal controls.

HSBC noted that the payment reflected a 15-percent reduction in the fine amount in recognition of the bank's cooperation during the investigation as well as its "extensive remediation".

In documents filed Thursday in Brooklyn federal court, HSBC admitted to using confidential information in two instances for its own profit.

The move comes after HSBC reached settlements over its forex trading business with the Financial Conduct Authority and US Commodity Futures Trading Commission in November 2014.

HSBC has already paid millions in fines for misconduct in its foreign exchange operations.

The French financial prosecutor's office claimed HSBC's Swiss private banking unit helped clients evade tax.