Two of HSBC's top currency traders have been charged in New York today as part of the US investigation into rate-rigging, currency fixing and market manipulation.
One, Mark Johnson, the bank's London-based global head of foreign exchange was arrested at John F Kennedy airport yesterday by FBI agents and was charged this afternoon in a federal court in Brooklyn with "conspiring to defraud a client."
US prosecutors allege Johnson, along with Stuart Scott, HSBC's former head of foreign exchange trading in Europe, the Middle East and Africa front-run a customer order worth $3.5bn in sterling (£2.7bn in today's prices) at some point in late 2011 to net HSBC around $8m in profit.
Front-running is a form of fraud where individuals buy or sell financial instruments ahead of upcoming orders from clients and customers to cash in on anticipated market movements.
US Attorney Robert Capers said the pair "placed personal and company profits ahead of their duties of trust and confidentiality owed to their client."
The charges are the first in the US Justice Department's three-year investigation into foreign currency rigging.
The US prosecutors said the pair "wove a web of lies" when confronted by their client, which was "designed to conceal the truth and divert attention away from their fraudulent trades."
HSBC declined to comment.
Earlier this month, three former Barclays bankers were found guilty by a UK court for their role in manipulating the Libor currency benchmark between June 2005 and September 2007.