The Man From FCPA had not heard the term ‘front-loading’ for some time. It may well have been as far back as the Bernie Madoff scandal, when whistleblower Harry Markopolos thought one of the schemes that Madoff was using was to front-load the sales of stock to come up with his annual 20% return rate. It turned out that even Markopolos could not imagine Madoff was running a $60bn Ponzi scheme. Yet front-loading is still an illegal scam. Unfortunately for U.K. bank HSBC, it appears two of its foreign currency (forex) trading executives in the United States were engaging this scheme.
The news could certainly have not been welcomed at HSBC as the bank had previously settled money laundering and currency manipulation charges for several billion dollars. Moreover, a New York Times article reported that amid ongoing U.S. Justice Department investigations, HSBC had set aside another $1.3 billion for additional settlements. On top of this comes the recent news that the U.K. Chancellor of the Exchequer had interceded on behalf of the bank when the Justice Department was considering the penalty assessment for the bank in relationship to the money-laundering allegations.
