HSBC Accused of Fraud and Wrongdoing on FX Trading Desk by ECU

ECU Group, a currency management, accused HSBC of fraud and wrongdoing within its forex trading desk between 2004 to 2006. A "rotten culture" pervaded the multinational investment bank during the period, with bankers exploiting confidential data of clients, according to a claim made to the UK's High Court on Monday.

ECU Group argues that the bank committed fraud in connection with 52 forex trades it did with HSBC throughout the mentioned years. Such allegations were revealed at the outset of a seven-week trial. The bank refuted all of the assertions of ECU Group.

This is not the first time, however, the ECU Group leveled similar charges against HSBC. A statement made by the group back in 2006 said that HSBC traders allegedly traded using confidential data of an upcoming client.

No evidence was found showing HSBC's alleged misconduct after an internal review into purported unusual forex pricing movements that year. "ECU's case is that HSBC's foreign exchange trading desk between 2004 and 2006 were rotten. Traders treated clients' orders as an opportunity for self-enrichment," according to ECU Group lawyer Richard Lissack QC, who testified in court on Monday.

HSBC, on the other hand, refuted the allegations, claiming that the ECU's present legal process against them is "a farrago of contrived and legally incoherent claims."

HSBC was embroiled in a scandal involving forex market manipulation in 2013. HSBC was fined $393 million by the UK Financial Conduct Authority (FCA) and $276.5 million by US Federal Reserve.

Fazzaco reported HSBC​'s exit from the US domestic retail banking services in May.​