Last checked at 
LONDON (Alliance News) - The US Justice Department on Wednesday said one current and one former employee of HSBC Holdings PLC have been charged with attempting to defraud an unnamed client of the bank through a scheme known as "front running".
The US DoJ said the head of global foreign exchange cash trading at HSBC Holdings PLC's HSBC Bank PLC subsidiary, Mark Johnson, and the bank's former head of foreign exchange cash trading for Europe, the Middle East and Africa, Stuart Scott, have both been charged by complaint with conspiracy to commit wire fraud.
Johnson was arrested at New York's John F Kennedy International Airport on Wednesday.
"The defendants allegedly betrayed their client's confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank," said Assistant Attorney General Leslie Caldwell. "This case demonstrates the Criminal Division's commitment to hold corporate executives, including at the world's largest and most sophisticated institutions, responsible for their crimes."
According to the complaint, in November and December 2011 Johnson and Scott misused information provided to them by a client which had hired HSBC to execute a foreign exchange transaction related to the planned sale of one of the client's foreign subsidiaries.
"The complaint alleges that, as part of the scheme, both Johnson and Scott made misrepresentations to the client about the planned foreign exchange transaction that concealed the self-serving nature of their actions," the DoJ said.
Specifically, the complaint alleges Johnson and Scott caused a USD3.5 billion foreign exchange transaction to be executed in a manner designed to spike the price of sterling, "to the benefit of HSBC and at the expense of their client".
In total, the DoJ said HSBC allegedly generated around USD8.0 million in profit from the transaction, including profit generated from the conduct of Johnson, Scott and other trades whom they directed.
"The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty," the DoJ added.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
