Magazine article American Banker

Morning Scan: HSBC Banker Arrested in Forex Case

Magazine article American Banker

Morning Scan: HSBC Banker Arrested in Forex Case

Article excerpt

Byline: Victoria Finkle

Receiving Wide Coverage ...

Crackdown: A top banker was arrested on criminal charges Wednesday, but those looking for prosecutions resulting from the financial crisis are still going to be disappointed. Mark Johnson, a top foreign-exchange executive at HSBC is accused of "front running" a currency trade for a client in 2011, which was worth about $3.5 billion. The deal won the bank about $8 million at the time, albeit to the detriment of the company involved. Another HSBC banker, Stuart Scott, has also been charged. What did Johnson say when the deal went through? "Ohhhh, f--ing Christmas," reports the Wall Street Journal, based on a transcript of the recorded call. Too bad this holiday season may be spent in front of a jury of his peers.

According to the Financial Times, HSBC cleared the bankers involved during an internal investigation years ago, but apparently the Justice Department isn't satisfied.

"The charges are a boon to the Justice Department, which until now has not mounted any cases against individuals in its wide-ranging investigations into currency manipulation by the major banks," says the New York Times.

(Haven't had your coffee yet? The Times also has a helpful explainer on how front running works, while the FT has an FAQ detailing the issues in the case.)

Going minimalist: On Wednesday, Morgan Stanley reported that its second-quarter profit and revenue had dropped from a year before. Like many companies these days, the bank is trying to do "more with less" after selling off an oil merchant and cutting staff. Wall Street Journal, Financial Times

Wall Street Journal

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