Wednesday, June 7, 2017 - HSBC could face fresh litigation over forex

HSBC
Source - https://www.ft.com/content/1c83500c-4ada-11e7-919a-1e14ce4af89b
Where - United Kingdom of Great Britain and Northern Ireland
Business line - Trading and Sales
Copyright © Financial Times (www.ft.com) 2017

HSBC is facing possible legal action over allegations of historical foreign exchange market manipulation.

Currency investment firm, ECU Group, has filed a complaint requesting HSBC hands over records relating to three foreign exchange trades made by the bank in 2006.

ECU believes HSBC traders were involved in front-running of its foreign exchange orders, therefore profiting at the firm’s expense.

The firm had raised concerns at the time, but, according to the Financial Times, was convinced by HSBC to drop the matter. Fresh interest has been generated as a result of a recent US Department of Justice case which saw two HSBC foreign exchange traders charged with front running a client’s trade in 2016.

The bank had carried out an internal review of its foreign exchange trading and found no breaches of its code of conduct., but the traders were charged despite this.

As a result, ECU has filed an application for a pre-action disclosure to gather information ahead of potential legal action. The firm has asked to see HSBC’s interbank dealing tickets, deal log entries and instant messages for the three trades in question.

Neither party has commented on the matter.