HSBC reviewing 2013 forex probe after trader's arrest: source
By Lawrence White and Kirstin Ridley
LONDON (Reuters) - HSBC (HSBA.L: Quote) is reviewing a past investigation of forex trades after the arrest on Tuesday night of a senior manager in New York for alleged fraud, according to a source familiar with the matter.
HSBC examined the trades done by Mark Johnson, its global head of foreign exchange cash trading, in 2013 as part of a broader internal probe and found no irregularities, the source said.
A spokeswoman for HSBC declined to comment.
Johnson was on Wednesday charged in a criminal complaint filed in a federal court in Brooklyn with engaging in a scheme to front-run a $3.5 billion transaction by one of the bank's clients, alongside former HSBC executive Stuart Scott. Both men were charged with wire fraud conspiracy.
On Wednesday the bank said it was co-operating with the Department of Justice's (DoJ) investigation.
In its statement, the DoJ did not name the client the pair allegedly defrauded, but a different source familiar with the situation said the trades involved British oil firm Cairn Energy (CNE.L: Quote).
An HSBC spokesman said the bank is cooperating in the DoJ's foreign exchange investigation. Cairn Energy was not immediately available to comment.
Scott, who was head of cash trading for Europe, left HSBC in 2014. Continued...