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The arrest of HSBC's Mark Johnson, global head of foreign exchange cash trading in London for involvement in a multi-billion pound Forex scam following similar charges made against Stuart Scott HSBC's former head of currency trading in Europe, the Middle East and Africa sends a crystal clear message that the FBI and other law enforcement agencies are deadly serious in their efforts to stamp out financial crime. The long running FBI investigation alleges that both men were involved in defrauding clients and rigging a multi-billion pound deal for their own benefit and that of the bank. The assistant attorney general made it clear that no matter how highly placed the individuals involved in fraud are, they will be called to account and the banks will also be held responsible.
This follows the $ 5.6 billion fines handed to four banks last year who pleaded guilty to conspiracy to rig the Forex market; and the FCA's (UK Financial Conduct Authority) fine of £1.1billion, the largest known in the City of London, to five banks for failing to prevent their traders' misconduct in manipulating the markets.
Global investment banks must move quickly to get their houses in order or a similar fate may await them.
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