Please forward this error screen to 139. US investigation into currency city forex-rigging, it announced this evening. US Department of Justice, resolving its probe into conduct in the lender’s global markets business during 2010 and 2011, HSBC said in a statement.
The fine is the latest in a string of actions by authorities on both sides of the Atlantic against its foreign exchange trading arm. Investigations which have already found Mark Johnson, a former currency trading executives, guilty of front-running a client’s trade. Another former executive, Stuart Scott, is currently fighting an attempt to extradite him to the US to face charges he denies. 4m in restitution, although HSBC said the payment had been reduced by 15 per cent because of its cooperation with the investigation. It will have no effect on the bank’s full-year results, due on 20 February, as money was already set aside in previous announcements. 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. These additional steps include implementing algorithms to manage risk around benchmark orders, updating its employee policies, and hiring external firms to monitor its trades.
The latest DPA by the bank comes just over a month after a similar arrangement with the DoJ over money laundering charges ended after five years. HSBC has already paid millions in fines for misconduct in its foreign exchange operations. 275m to the US Commodity Futures Trading Commission. 175m to the US Federal Reserve «unsafe and unsound practices» in foreign exchange trading. This market determines the foreign exchange rate. The main participants in this market are the larger international banks.
Financial centers around the world function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market works through financial institutions, and operates on several levels. Behind the scenes, banks turn to a smaller number of financial firms known as «dealers», who are involved in large quantities of foreign exchange trading. The foreign exchange market assists international trade and investments by enabling currency conversion.
In a typical foreign exchange transaction, a party purchases some quantity of one currency by paying with some quantity of another currency. The modern foreign exchange market began forming during the 1970s. This followed three decades of government restrictions on foreign exchange transactions under the Bretton Woods system of monetary management, which set out the rules for commercial and financial relations among the world’s major industrial states after World War II. 24 hours a day except weekends, i.