A large, international banking organization headquartered in London has been fined $175 million for practices related to “deficiencies” in its foreign exchange trading, the Federal Reserve announced Friday.
HSBC Holdings plc, London, United Kingdom, and HSBC North America Holdings Inc., New York, New York, were fined for “unsafe and unsound practices” for deficiencies in the organization’s oversight of, and internal controls over, foreign exchange traders who buy and sell U.S. dollars and foreign currencies for the firm’s own accounts and for customers.
The Fed said that the firm failed to detect and address its traders’ misuse of confidential customer information, as well as using electronic chatrooms to communicate with competitors about their trading positions.
In addition to the fine, the Fed’s order requires HSBC to improve its controls and compliance risk management concerning the firm’s foreign exchange trading.