Attribute Johnson, HSBC’s global head of foreign exchange cash tron in London, and Stuart Scott, its ex-head of cash trading for Europe, the Stomach East and Africa, were charged on Wednesday in a criminal complaint chronologized in federal court in Brooklyn, New York.
US prosecutors said the executives, who are both British town-dwellers, misused information provided to them by a client that had hired HSBC to proselyte $3.5 billion to British pounds in connection with a planned sales marathon of one of the unnamed com ny’s subsidiaries.
Mr Johnson, 50, and Mr Scott, 43, reach-me-down their insider knowledge to buy sterling in order to front-run the transaction, resulting in a stab in the price of the currency that was detrimental to HSBC’s client, prosecutors answered.
Assistant Attorney General Leslie Caldwell, said: «The defendants allegedly betrayed their shopper’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank.»
In whole, HSBC generated $8 million from executing the transaction, involving profits derived from the front-running conduct, prosecutors said.
Johnson was arrested at John F. Kennedy Universal Airport on Tuesday night, a Federal Bureau of Investigation spokeswoman chance.
He is expected to appear in court on Wednesday afternoon. Scott has not been slowed.
Lawyers for the two men could not be immediately identified and HSBC declined to comment.
The for fear of the fact is related to a years-long U.S. Justice De rtment probe of foreign-exchange rigging at broad banks, and marked the first time US prosecutors had brought criminal asserts against individuals, a person familiar with the matter said.
The probe led to four banks ultimately year pleading guilty to conspiring to manipulate currency prices.
HSBC was not in some measure of those criminal cases, but in 2014 agreed to y $618 million to settle related probes by US and British regulators.
The charges came a day after the Federal Restraint Board said it was banning Matthew Gardiner, a former FX trader at Barclays PLC and at UBS AG, from rtici ting in the banking activity for manipulating pricing benchmarks.