(FILES) This file photo taken on December 2, 2015 shows a long exposure photo of the sign for banking giant HSBC in Geneva. The US attorney general quashed staff proposals to prosecute banking giant HSBC over money laundering in 2012 because of worries about the global financial system, a congressional report said July 11, 2016. / AFP PHOTO / FABRICE COFFRINI
NEW YORK: A senior manager at HSBC Holdings Plc has been arrested in New York and charged along with a former foreign exchange executive for engaging in a scheme to defraud one of the bank’s clients in a US$3.5bil (RM14.2bil) currency transaction.
Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, and Stuart Scott, the bank’s former head of cash trading for Europe, the Middle East and Africa, were charged with wire fraud conspiracy in a criminal complaint filed in federal court in Brooklyn, New York.
Johnson was arrested at John F. Kennedy International Airport on Tuesday night, a Federal Bureau of Investigation spokeswoman said. He is expected to appear in court on Wednesday afternoon. Scott has not been arrested.
Lawyers for the two men could not be immediately identified.
The case is related to a years-long US Justice Department probe of foreign-exchange rigging at global banks, and marked the first time US prosecutors had brought criminal charges against individuals, a person familiar with the matter said.
The probe led to four banks last year pleading guilty to conspiring to manipulate currency prices. HSBC was not part of those criminal cases, but in 2014 agreed to pay US$618mil to resolve related probes by US and British regulators.
The charges came a day after the Federal Reserve Board said it was banning Matthew Gardiner, a former FX trader at Barclays PLC and at UBS AG, from participating in the banking industry for manipulating pricing benchmarks. - Reuters
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