HSBC faces fresh legal battle over forex manipulation allegation
HSBC is facing a fresh law suit over allegations of forex manipulation.
The bank’s traders are being accused of manipulating the markets for their own profit more than a decade ago, according to the Financial Times.
ECU Group, a UK-based currency investment firm, filed an application to the commercial court asking for HSBC to hand over its records on three large foreign exchange orders from 2006 – each worth over $100 million (£77 million).
The company’s application is for a ‘pre-action disclosure’, a move before potentially filing full lawsuit. If the court finds evidence that there was concealment by HSBC it can waive the statute of limitations, which would normally prevent a legal action more than six years after an event.
It is asking for the bank’s interbank dealing tickets, deal log entries and relevant Bloomberg instant messages for the three trades from both the London and New York trading desks.
The group felt it was a victim, but was persuaded by HSBC to drop the matter. At the time the trades took place, ECU suspected it was being ripped off by the bank’s traders.
While HSBC promised a full inquiry after ECU complained, it said it found no wrongdoing.
The FT reported that the currency investment firm decided to pursue the lawsuit now after the US Department of Justice charged two HSBC forex traders with front running and arrested one in New York’s John F Kennedy airport, last year.
Back in 2014, the bank paid a $618 million fine to US, UK and Swiss regulators for its involvement in the forex rate-rigging scandal. It’s still being investigated by the DoJ.Back in 2014, the bank paid a $618 million fine to US, UK and Swiss regulators for its involvement in the forex rate-rigging scandal. It’s still being investigated by the DoJ.
ECU and HSBC did not comment.
Source: CityWire – HSBC faces fresh legal battle over forex manipulation allegation
