The US derivatives industry watchdog has fined HSBC USA $45 million for allegedly allowing “deceptive and deceptive trading” by traders and for failing to keep records of business calls. Commodity Futures and Trading Commission (CFTC) announce monetary sanction on Friday, indicating that it had reached a settlement with British global bank subsidiary HSBC.
today @tweet I issued a statement about the CFTC’s orders against HSBC for fraudulent and manipulative swap trading and more. Read it here: https://t.co/GgenohESmS
– CFTC (CFTC) May 12, 2023
According to the CFTC, between March 2012 and 2015, traders in the HSBC branch, registered as a temporary swap dealer, repeatedly engaged in deceptive trading and plagiarism
Read this term Related trade-offs
Read this term with bond issuers. The watchdog noted that the company’s traders used material counterparty confidential information about the timing and pricing of issuer swaps to increase HSBC’s profitability at their expense.
Furthermore, the regulator alleged that the subsidiary had attempted to manipulate the on-screen prices, which issuer exchanges were based in part, by impersonating the in-between brokerages that controlled the screens. Spoofing refers to a fraudulent practice whereby traders place orders with the intention of canceling them before they are executed.
“HSBC traders deliberately traded to brokerage firms that control the relevant screens during pricing calls in which bond issues and related issuer swaps were priced, and HSBC traders intentionally structured their trading to move the prices of related swaps on these screens,” the CFTC explained.
The watchdog indicated that supervisors and senior management at the swap dealer were aware of this behavior and encouraged traders to engage in the practice.
On the other hand, the derivatives watchdog said that from March to July 2020 at least, HSBC failed to make and keep recordings of mobile phone calls related to the exchange business due to a recording failure.
In a separate statement, the derivatives market supervisor said it criticized two of HSBC’s temporary swap dealers, HSBC Bank USA and HSBC Bank Plc, as well as HSBC Securities (USA) Inc. a futures contract trader,
With more than $30 million in fines Because of their failures to keep records and discuss deals via unapproved methods such as personal text messaging and WhatsApp.
that’s just in, @tweet A statement about HSBC’s market manipulation and widespread use of WhatsApp and other unauthorized communication platforms to evade regulatory oversight. Read it here: https://t.co/rqmqMYFCm3
– CFTC (CFTC) May 12, 2023
“The matter further finds that the widespread use of unauthorized communication methods violates HSBC’s own policies and procedures, which generally prohibit business-related communications conducted via unauthorized methods,” the CFTC explained.
“Moreover, some of the supervisory personnel responsible for ensuring compliance with the companies’ policies and procedures themselves used unapproved communication methods to engage in business-related communications, in violation of company policy,” it added.
CFTC stresses campaign on ‘outside the channel’
Meanwhile, the CFTC announced earlier Thursday that it has fined Bank of Nova Scotia (BNS), another provisionally registered swaps dealer, and Scotia Capital USA Inc, a futures contract dealer, for with a fine of $15 million for failing to keep their records “for a period of years”. The regulator also found “widespread use of unapproved communication methods” among affiliates.
The CFTC announced today that it has ordered the Bank of Nova Scotia to pay a $15 million fine for failing to keep records and oversee the widespread use of unapproved communication methods. Learn more: https://t.co/Ecdvrznljp
– CFTC (CFTC) May 11, 2023
The CFTC’s latest action against affiliates of HSBC and BNS is a continuation of its crackdown on e-commerce firms in the country for using WhatsApp-like devices in official business communications. In September last year, the watchdog fined 16 Wall Street firms a total of $1.1 billion for their “out of channel contacts.”
The companies include subsidiaries of Barclay, BofA, Citigroup and Goldman Sachs, among others.
The US derivatives industry watchdog has fined HSBC USA $45 million for allegedly allowing “deceptive and deceptive trading” by traders and for failing to keep records of business calls. Commodity Futures and Trading Commission (CFTC) announce monetary sanction on Friday, indicating that it had reached a settlement with British global bank subsidiary HSBC.
today @tweet I issued a statement about the CFTC’s orders against HSBC for fraudulent and manipulative swap trading and more. Read it here: https://t.co/GgenohESmS
– CFTC (CFTC) May 12, 2023
According to the CFTC, between March 2012 and 2015, traders in the HSBC branch, registered as a temporary swap dealer, repeatedly engaged in deceptive trading and plagiarism
Read this term Related trade-offs
Read this term with bond issuers. The watchdog noted that the company’s traders used material counterparty confidential information about the timing and pricing of issuer swaps to increase HSBC’s profitability at their expense.
Furthermore, the regulator alleged that the subsidiary had attempted to manipulate the on-screen prices, which issuer exchanges were based in part, by impersonating the in-between brokerages that controlled the screens. Spoofing refers to a fraudulent practice whereby traders place orders with the intention of canceling them before they are executed.
“HSBC traders deliberately traded to brokerage firms that control the relevant screens during pricing calls in which bond issues and related issuer swaps were priced, and HSBC traders intentionally structured their trading to move the prices of related swaps on these screens,” the CFTC explained.
The watchdog indicated that supervisors and senior management at the swap dealer were aware of this behavior and encouraged traders to engage in the practice.
On the other hand, the derivatives watchdog said that from March to July 2020 at least, HSBC failed to make and keep recordings of mobile phone calls related to the exchange business due to a recording failure.
In a separate statement, the derivatives market supervisor said it criticized two of HSBC’s temporary swap dealers, HSBC Bank USA and HSBC Bank Plc, as well as HSBC Securities (USA) Inc. a futures contract trader,
With more than $30 million in fines Because of their failures to keep records and discuss deals via unapproved methods such as personal text messaging and WhatsApp.
that’s just in, @tweet A statement about HSBC’s market manipulation and widespread use of WhatsApp and other unauthorized communication platforms to evade regulatory oversight. Read it here: https://t.co/rqmqMYFCm3
– CFTC (CFTC) May 12, 2023
“The matter further finds that the widespread use of unauthorized communication methods violates HSBC’s own policies and procedures, which generally prohibit business-related communications conducted via unauthorized methods,” the CFTC explained.
“Moreover, some of the supervisory personnel responsible for ensuring compliance with the companies’ policies and procedures themselves used unapproved communication methods to engage in business-related communications, in violation of company policy,” it added.
CFTC stresses campaign on ‘outside the channel’
Meanwhile, the CFTC announced earlier Thursday that it has fined Bank of Nova Scotia (BNS), another provisionally registered swaps dealer, and Scotia Capital USA Inc, a futures contract dealer, for with a fine of $15 million for failing to keep their records “for a period of years”. The regulator also found “widespread use of unapproved communication methods” among affiliates.
The CFTC announced today that it has ordered the Bank of Nova Scotia to pay a $15 million fine for failing to keep records and oversee the widespread use of unapproved communication methods. Learn more: https://t.co/Ecdvrznljp
– CFTC (CFTC) May 11, 2023
The CFTC’s latest action against affiliates of HSBC and BNS is a continuation of its crackdown on e-commerce firms in the country for using WhatsApp-like devices in official business communications. In September last year, the watchdog fined 16 Wall Street firms a total of $1.1 billion for their “out of channel contacts.”
The companies include subsidiaries of Barclay, BofA, Citigroup and Goldman Sachs, among others.
