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HSBC Settles CFTC Charges for $75 Million Over Deceptive Trading

HSBC Holdings Plc's units have agreed to pay $75 million to settle charges by the U.S. Commodity Futures Trading Commission (CFTC). The charges involve manipulative and deceptive trading, as well as record-keeping failures, according to a statement from the regulator.

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HSBC sign

HSBC Bank USA's $45 Million Civil Penalty

The CFTC announced that HSBC Bank USA will pay a $45 million civil penalty for manipulative and deceptive trading related to swaps, spoofing, and record-keeping failures.

Settlement of Record-Keeping and Supervision Failures

HSBC Bank USA, HSBC Bank Plc, and HSBC Securities admitted to charges concerning record-keeping and supervision failures. They agreed to pay a $30 million settlement, as stated in a separate CFTC announcement.

HSBC's Compliance Investments and Efforts

An HSBC spokesperson noted that the bank has significantly invested in enhancing compliance procedures and diligently maintained high professional conduct standards across the organization.

CFTC Findings on HSBC's Manipulative Trading

The CFTC found that HSBC traders engaged in manipulative and deceptive trading in interest rate swaps and other financial products. In some cases, bank supervisors were aware of the misconduct, with a senior manager directing the wrongdoing in one instance.

HSBC's Stance on Charges from 2012 to 2016

HSBC neither admitted nor denied the charges, which allegedly occurred between March 2012 and April 2016.

Personal Device Usage and SEC Penalty

The CFTC reported that HSBC failed to prevent employees, including senior staff and compliance personnel, from discussing work through personal texts and WhatsApp. The U.S. Securities and Exchange Commission (SEC) imposed a penalty on HSBC for related charges on Thursday.

Regulators Target Personal Device Use

Regulators have been focusing on registered dealers using personal devices, asserting that failure to maintain records can hinder oversight and investigations into potential misconduct.

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