U.S. authorities have arrested an HSBC executive for his alleged role in a US$3.5-billion currency frontrunning scheme, Bloomberg reports.
Mark Johnson, HSBC’s head of foreign exchange, was taken into custody at New York’s Kennedy airport. He’s based in the bank’s London offices.
Read: Ex-investment bank exec admits to $38M fraud
Stuart Scott, HSBC’s former head of currency trading in Europe, is also implicated in the scheme.
The U.S. Justice Department alleges that in 2011, the two men used insider knowledge to trade ahead of an HSBC currency conversion worth US$3.5 billion. The bank was helping an unknown company sell a subsidiary in India. In the days before the massive currency trade, the men allegedly bought British pounds, anticipating that the major conversion would spike the pound’s value when it was executed.
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