HSBC sacks head of European forex trading

Third senior currency dealer at the bank to pay for the scandal with his job

Click to follow
The Independent Online

HSBC has sacked its European currency trading chief in the wake of a huge $618m (£394m) fine for manipulating the £3.3trn a day foreign exchange market.

The bank is understood to have “let go” Stuart Scott on Tuesday following the record-breaking fines for HSBC and five other banks who were fined a total of £2.6bn. Barclays has yet to settle.

HSBC declined to comment but Mr Scott is the third senior currency dealer at the bank to pay for the scandal with his job. Edward Pinto, a Scandinavian currency trader was fired in October along with Serge Sarramegna, head of its spot foreign exchange desk in London. Both had been suspended since the start of the year.

Europe’s biggest bank was hit with the combined fines from the Financial Conduct Authority and the US Commodity Futures Trading Commission in November.

Forex fixing was the latest in a long line of scandals to embarrass a tainted industry since the financial crisis - including the manipulation of interbank lending rates and gold prices as well as mis-selling of payment protection insurance.

The regulators published lurid details of how the traders gave themselves childish names like “the A-Team”, “the Three Musketeers” and “One Team, One Dream” as they worked together to rig the values of major currency rates such as the pound-dollar in order to boost their profits.

The traders boasted of their activities in specialist City electronic chatrooms and cajoled each other into helping manipulate the markets - often at the expense of their clients. Foreign exchange rates are used in millions of transactions every day, by tourists to traders, and it is critical that they can be trusted. The Serious Fraud Office is also investigating whether it can bring criminal actions over the case.

News of Mr Scott’s departure came as Asian-facing Standard Chartered admitted that it will have US monitors in its New York offices for another three years following a huge $327m fine for violating sanctions in place against Iran, the Sudan and two other countries in 2012, moving millions of dollars through the US. banking system on behalf of customers in the four sanctioned countries.

The move is part of an extension to its “deferred prosecution agreement” with the New York County district attorney and the US Department of Justice until 2017. Investigators are now probing whether the bank, largely focussed on emerging markets, violated American sanctions beyond 2007.

The news will come as a fresh blow to beleaguered chief executive Peter Sands, who is under pressure to improve performance after three profit warnings in a year. The bank’s share price has slumped to two year lows. Investec’s Ian Gordon said: “Under this arrangement, we believe it will be subjected to further regulatory scrutiny and considerable expense.”

The bank has created a new financial crime committee including nine executives from around the globe who will look to combat practices including bribery and money laundering. Chairman Sir John Peace said the move “demonstrates our commitment to strong conduct and compliance at all levels of the organisation.”