HSBC fires head of European currency trading

The foreign exchange rate-rigging scandal claimed another victim this week when HSBC fired Stuart Scott, its European head of currency trading, a month after the London-listed bank was fined $618 million by regulators over the issue.

HSBC was one of six banks that paid big fines to U.K., U.S. and Swiss regulators last month as punishment for control failures that were exposed by their role in the foreign exchange scandal that put the integrity of global financial markets back in question.

Logo of HSBC bank
Adam Jeffery | CNBC
Logo of HSBC bank

After agreeing the settlement with regulators, HSBC said it "does not tolerate improper conduct". Other regulators including the US Department of Justice, which is known for levying heavy fines, are still investigating the banks over the foreign exchange scandal.

Mr Scott, who joined HSBC in 2007, was based in London and ran the bank's currency trading operations in Europe, the Middle East and Africa. He was fired on Tuesday, a move first reported by the Wall Street Journal and confirmed by people familiar with the matter. HSBC declined to comment. Mr Scott was not immediate available for comment.

He is the third person that HSBC has fired in the wake of the foreign exchange trading scandal, the people said. In October the bank fired Edward Pinto, a Scandinavian currency trader, and Serge Sarramegna, head of its spot foreign exchange desk in London. The two traders had been suspended since the start of the year. In November, Frank Cahill, a currency trader who joined the US bank from HSBC in 2012, left Goldman Sachs.

According to settlement documents published by the U.K.'s Financial Conduct Authority, groups of unnamed bank traders who called themselves the "players", the "3 musketeers" and a "co-operative", were found to have attempted over a period of almost six years to have rigged key forex benchmarks, including at least one provided by central banks.

Using chat rooms, traders were also found to have attempted to trigger clients' stop-loss orders — a specified level to sell the currency to limit potential losses — for their own benefit. They also shared confidential information about client orders, the FCA found during its "Operation Dovercourt" investigation. However no specific allegations have been made against the traders who have left HSBC. They have not been charged with any wrongdoing.