HSBC's tax compliance could have been better
IBTimes UK

The Head of Forex Trading for Europe the Middle East and Africa has been "let go" by HSBC.

The dismissal of Stuart Scott is related to the $618m fine incurred by the bank for manipulating foreign exchange rates. HSBC, along with RBS, UBS, JP Morgan, Citi and Bank of America were fined a total of £2.6bn by UK and US regulators.

At the time, HSBC said it "does not tolerate improper conduct and will take whatever action is appropriate". The banks are still under investigation by US authorities.

Scott joins Serge Sarramegna, head of spot exchange in London, Edward Pinto, currency trader, as being fired in the wake of the foreign exchange scandal.

The investigation hit the headlines due to the nonchalant and cavalier manner in which the bankers involved manipulated currencies. A Financial Conduct Authority report revealed how they referred to themselves as the "3 musketeers" and the "players" in a chat room.

Scott joined HSBC in 2007 and in the same year, his team scooped the Best Bank for Emerging European, Middle Eastern and African Currencies award from FX Week magazine.

His dismissal comes on the heels of that of Frank Cahill, a forex trader at Goldman Sachs in London, who worked under Scott at HSBC. Cahill's dismissal is thought to be in connection with his role at HSBC.

In November, HSBC confirmed that it has set aside $378m to help pay for administration costs and a potential fine related to allegations that bankers sought to manipulate key currency markets.

The bank revealed in its third quarter interim management statement that it is currently in discussion with the UK's Financial Conduct Authority (FCA) over settling allegations over FX fixing amid reporting a 12% slump in earnings.

"Discussions are ongoing with the UK FCA regarding a proposed resolution of their foreign exchange investigation with respect to HSBC Bank's systems and controls relating to one part of its spot FX trading business in London," said HSBC.

The daily $5tn (£3tn, €3.9tn) currency market is the largest in the financial system and is pegged to the value of funds, derivatives and products.

Morningstar estimates that $3.6tn in funds, including pension and savings accounts, track global indexes.

FX rates are calculated and compiled by using data from a variety of submitted provisions on a number of platforms, such as ThomsonReuters.

It is then calculated by WM, a unit of State Street, to form WM/ThomsonReuters at 1600 GMT daily.

HSBC, as well as a dozen global banks, are under investigation by US and UK authorities over FX rigging allegations.

Barclays set aside £500m to deal with a raft of investigations into allegations that traders at the bank had sought to manipulate the currency market while the RBS confirmed it has cordoned off £780m to cover all litigation and conduct related costs.