Last checked at 
* Bank had found nothing wrong in prior probe of trades
* HSBC FX trader and former colleague charged with fraud
* FCA says continuing to investigate individuals
By Lawrence White and Kirstin Ridley
LONDON, July 21 (Reuters) - HSBC is reviewing apast investigation of forex trades after the arrest on Tuesdaynight of a senior manager in New York for alleged fraud,according to a source familiar with the matter.
HSBC examined the trades done by Mark Johnson, its globalhead of foreign exchange cash trading, in 2013 as part of abroader internal probe and found no irregularities, the sourcesaid.
A spokeswoman for HSBC declined to comment.
Johnson was on Wednesday charged in a criminal complaintfiled in a federal court in Brooklyn with engaging in a schemeto front-run a $3.5 billion transaction by one of the bank'sclients, alongside former HSBC executive Stuart Scott. Both menwere charged with wire fraud conspiracy.
On Wednesday the bank said it was co-operating with theDepartment of Justice's (DoJ) investigation.
In its statement, the DoJ did not name the client the pairallegedly defrauded, but a different source familiar with thesituation said the trades involved British oil firm Cairn Energy.
An HSBC spokesman said the bank is cooperating in the DoJ'sforeign exchange investigation. Cairn Energy was not immediatelyavailable to comment.
Scott, who was head of cash trading for Europe, left HSBC in2014.
"Our client strongly denies the allegations. Given there areongoing proceedings it would be inappropriate to comment furtherat this time," Gerallt Owen, a lawyer at Withers who isrepresenting Scott said in an emailed statement.
The investigation could deal a reputational blow to HSBC ina business area in which it is particularly strong. The lenderspecialises in helping clients engage in cross-border deals,aided by its large global network at a time when many rivalinvestment banks are shrinking.
Authorities in the UK said they had been working closelywith counterparts across the Atlantic, although the DoJ is thefirst prosecutor to lay charges in the multi-year worldwideinvestigation into forex market-rigging.
Some of the world's biggest banks, including HSBC, paid acombined total of around $10 billion to settle U.S. and Britishallegations of foreign exchange manipulation in 2014 and 2015.
Britain's Serious Fraud Office dismissed suggestions it hadmissed possible wrongdoing while sifting through 500,000documents in its wider forex investigation before closing itearlier this year.
"There is no suggestion that something was missed. Wefollowed the evidence available to us in our jurisdiction inrespect of the Forex investigation and reached the conclusionthat it was insufficient to support a realistic prospect ofconviction," a spokesman said.
Britain's Financial Conduct Authority (FCA) said it iscontinuing to investigate individuals over allegations ofmisconduct in the foreign exchange investigation.
"We have been liaising with the DoJ regarding FXinvestigations on both sides of the Atlantic. We will notcomment on specific strands of investigations," a spokesman forthe FCA said. (Reporting By Lawrence White and Kirstin Ridley, additionalreporting by Jamie McGeever; editing by Rachel Armstrong andSusan Thomas)
