HSBC Head Of Currency Trading Arrested At JFK For FX Rigging

(RTTNews) - U.S. authorities arrested and charged HSBC's (HSBC, HSBA.L) global head of foreign exchange cash trading Tuesday night, alleging he and others front ran a client order and netted millions in profits, according to reports.

Mark Johnson was arrested by Federal Bureau of Investigation agents Tuesday night at John F. Kennedy international airport in New York. He will appear in Brooklyn federal court later Wednesday, the reports noted.

Federal prosecutors reportedly alleged Johnson and Stuart Scott, the former HSBC European head of currency trading, traded ahead of a client's purchase of $3.4 billion worth British Sterling, the person said. They are charged with one count of conspiracy to commit wire fraud.

On Tuesday, the Federal Reserve Board announced it prohibited a former foreign exchange (FX) trader from participating in the banking industry for his manipulation of FX pricing benchmarks.

Matthew Gardiner, a former FX trader at Barclays PLC and at UBS AG, used electronic chat rooms to coordinate FX trading, facilitate manipulation of FX pricing benchmarks, disclose confidential customer information to traders at other organizations, and engage in other unsafe and unsound practices.

The enforcement action against Gardiner follows the Board's May 2015 enforcement actions against both Barclays and UBS for unsafe and unsound practices related to their compliance and control failures concerning practices in the FX markets. Those actions required UBS and Barclays to collectively pay $684 million in penalties for control deficiencies related to FX trading.