The “corrupt culture” was rampant in the HSBC foreign trade market between 2004 and 2006, when investors misused the secret to give “customers” rules, the UK Supreme Court said on Monday.
This was stated at the start of the seven-week trial when the ECU Group Treasurer accused HSBC of fraud and misconduct related to 52 forex trading transactions with the bank at the time. HSBC denies its allegations for a number of reasons.
The lawsuit threatens to reopen old stocks in the $ 6.6tn-a-day foreign exchange market, which was shaken by claims in 2013 that several international banks have been exchanging currency prices systematically for years. HSBC paid $ 343m in fines and refunds to the Financial Conduct Authority and $ 276.5m to the US Federal Reserve for failure to monitor FX trading between 2008 and 2013.
ECU, a former HSBC customer, says the inefficiency of HSBC’s merchants in the case includes the forward sale using confidential customer information. It also alleges that HBPB, the state-owned HSBC bank, “stole pipes” when it added “bribes” or signs to the death targets reported to the ECU for illicit gain.
The ECU first lodged a complaint with HSBC about the FX move in February 2006 but was told, after an investigation within HSBC, that there was no evidence of wrongdoing.
ECU re-evaluated the trade after 2016, when the US Department of Justice issued a ruling against former HSBC FX traders over what was happening in front of another HSBC counterpart – Cairn Energy.
On Monday Richard Lissack QC, an ECU lawyer, told the Supreme Court that the case was related to “scandals” in HSBC’s history.
“The ECU’s story is that the HSBC foreign exchange office between 2004 and 2006 was corrupt. Retailers take customer advice as an opportunity to enrich themselves, ”Lissack said.
In his letters, Lissack said HSBC traders saw the ECU’s operations as simple.
HSBC is due to open its case on Tuesday. In his letters, the bank said the “ECU statement” was “always banned” because the alleged incident took place more than 15 years ago and described the ECU’s case as “a false and illegitimate claim”.
“The ECU is now trying to be skeptical and to take advantage of the opportunity to meet their demands, which I would have done in 2006,” he said.
“The rules were not enforced and, apart from other incidents, the HSBC parties did not commit any wrongdoing on the ECU,” it said in the affidavit, adding that it denied any fraud or deliberate concealment in the case. The case is ongoing.
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