Washington, D.C. – HSBC Bank USA, N.A. (HSBC) has been slapped with a $45 million penalty by the Commodity Futures Trading Commission (CFTC) for manipulative and deceptive trading practices, spoofing, and recordkeeping failures spanning roughly eight years. The CFTC issued its order simultaneously filing and settling charges against the provisionally registered swap dealer on May 12, 2023.
The charges stem from conduct occurring between approximately March 2012 and July 2020. The CFTC found that between March 2012 and 2015, HSBC traders engaged in manipulative trading of interest rate swaps, basis swaps, and swap spreads tied to transactions with bond issuers. These traders intentionally influenced pricing screens during telephonic pricing calls to boost HSBC’s profits at the expense of its counterparties.
Specifically, HSBC traders exploited confidential information regarding the timing and pricing of bond issuances to their advantage, failing to deal fairly and in good faith with counterparties. The order details instances where HSBC supervisors and senior management were aware of, and even directed, these practices.
Further investigation revealed that from September 2015 to April 2016, a trader supervising HSBC’s U.S. dollar swap desk engaged in spoofing within the voice-brokered swaps market. This involved placing bids and offers on a registered swap execution facility with the intention of canceling them before execution, aiming to manipulate prices on broker screens and prevent unfavorable price movements for HSBC.
As part of the settlement, HSBC is required to cease and desist from further violations of the Commodity Exchange Act (CEA). The bank must also undertake specified remedial measures, which it claims to have already begun implementing. CFTC Director of Enforcement Ian McGinley emphasized the agency’s “zero tolerance” for manipulative practices and its commitment to protecting market integrity and participants.
The order underscores the CFTC’s vigilance in prosecuting disruptions to market integrity and fraudulent practices within the financial sector.
Source: CFTC.gov
Related Federal Cases
- No Defendant Found, Neglect and Suffering in Nursing Homes, USA, 2023 · Washington
- CDC Fails to Ensure Reliable Covid-19 Testing, USA, 2023 · Washington
- Comptroller Goulds Bank Regulatory Loopholes, Washington D.C., 2023 · Washington
- FDIC Unveils Hidden Depths of Bank Deposits, Washington DC, 2025 · Washington
- Federal Reserve Board and FDIC, Bank Resolution Plans Released, Was… · Alabama
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News