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19:12, 30-Sep-2017
US fines HSBC $175 million for lax forex trading oversight
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The latest in a series of fines for banks that fail to prevent market manipulation hit the HSBC Holdings on Friday as the US Federal Reserve levied a 175 million US dollar fine on the company for "unsafe and unsound practices" in its foreign exchange trading business.
The US central bank said HSBC failed to monitor chat rooms where traders swapped information about investment positions, echoing findings by other regulators investigating the 5 trillion-dollar-a-day foreign exchange - or FX - market.
"The board levied the fine for deficiencies in HSBC’s oversight of and internal controls over FX traders," the Fed said in a statement.
US Federal Reserve building in Washington, D.C., US on October 12, 2016. /Reuters Photo
US Federal Reserve building in Washington, D.C., US on October 12, 2016. /Reuters Photo
The fine follows others of more than 4.3 billion dollars levied by the US Commodity Futures Trading Commission and Britain’s Financial Conduct Authority on six banks including HSBC in November 2014.
“We are pleased to have resolved this matter related to practices in the FX market from 2008-2013,” said company spokesman Rob Sherman.
Authorities accused HSBC dealers of sharing confidential information about client orders and coordinating trades to boost their own profits. The foreign exchange benchmark they allegedly manipulated is used by asset managers and corporate treasurers to value their holdings.
The Fed’s enforcement action also requires HSBC to improve its controls and compliance in risk management concerning the firm’s FX trading, the Fed said.
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HSBC failed to monitor chat rooms where traders swapped information about investment positions
Source(s): Reuters