HSBC imposed a $175 million money penalty for illegal gains of its FX traders

3 October 2017

HSBC The U.S. Federal Reserve published an official statement about its actions taken to penalize HSBC for gross negligence seen in its loose practices in the trading operations at the foreign exchange. The central bank imposed a $175 million fine on the financial institution for turning a blind eye on speculations orchestrated by its traders to illegally push up their profits on manipulating the FX benchmarks.

The Fed’s statement explains that HSBC was careless about its chat rooms where foreign exchange traders shared the confidential information about their clients and allegedly speculated the FX trades behind the scene for the purpose of illicit gains. The Fed noted that the board imposed the penalty on the bank for deficient control and monitoring of the FX traders.

The report added that six banks, including HSBC, have been fined for the total amount of $4.3 billion by the U.S. Commodity Futures Trading Commission and the U.K.’s Financial Conduct Authority.

In addition to the money penalty, HSBC has been instructed by the Federal Reserve to enhance its controls over the traders’ chat rooms.

Rob Sherman, spokesperson for HSBC, trying to rehabilitate the bank’s reputation, said that HSBC is pleased to have settled the case with the foreign exchange practices.

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