Fed fines HSBC $175M for FX practices
The Federal Reserve Board on Friday announced that it has issued an Order to Cease and Desist and Order of Assessment of a Civil Money Penalty to HSBC Holdings plc, London, United Kingdom, and HSBC North America Holdings Inc., New York, New York, $175 million for the firm's unsafe and unsound practices in its foreign exchange (FX) trading business.
The Board levied the fine for deficiencies in HSBC's oversight of, and internal controls over, FX traders who buy and sell U.S. dollars and foreign currencies for the firm's own accounts and for customers. The firm failed to detect and address its traders misusing confidential customer information, as well as using electronic chatrooms to communicate with competitors about their trading positions. The Board's order requires HSBC to improve its controls and compliance risk management concerning the firm's FX trading.