HSBC punished with $100 million bill for cheating clients

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(FinancialPress) — HSBC‘s financials continue to pile up the woes due to the financial institution‘s unruly behavior. The bank will be forced to pay $101.5 million to be done with a criminal case in the U.S.

The bank was accused of using currency trades to defraud its own customers to the tune of tens of millions of dollars.

John Cronan, an acting assistant attorney general at the U.S. Justice Department, chimed in on the subject: “The company misused confidential client information for its own profit on more than one occasion,” he said.

“This sort of misconduct not only harmed their clients, costing the victims money, but it also ran a serious risk of undermining the public’s confidence in our financial markets.”

HSBC bankers tinkered with the numbers for trades executed for two big corporate clients. In total, the scheme racked up over $46 million in revenue in favor of the bank between 2010 and 2011.

U.S. prosecutors found that the bank‘s employees traded the British pound before large-scale operations for their clients, benefitting the bank and working in detriment of the companies that hired them.

In consequence, HSBC has agreed to pay back $38.4 million in restitutions to one of the companies it defrauded – as well as a $63.1 million criminal tab. The benefitting company was not named by the Justice Department or the defendant.

The second company was Cairn Energy, which receiverd an $8 million restitution previously.

Mark Johnson, a former banker of the institution, has already been declared guilty of conspiracy and wire fraud. He could face up to 20 years in a federal prison.

Inspector General Jay Lerner of the Federal Deposit Insurance Corporation said that HSBC “is responsible for the conduct of its employees” and “must not be permitted to benefit from the fraud committed by bank personnel.“

 

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