India link in forex fraud at HSBC |
An India link has emerged in the alleged $3.5-billion forex trading fraud case at British banking giant HSBC, where two senior executives have been accused of doing `front-running` by cheating a client that was selling part-stake in an Indian subsidiary.The duo has been charged in the US of "conspiracy to commit wire fraud" while the client in question has been identified in media reports as Cairn Energy, which had sold an ownership stake in its Indian subsidiary Cairn India for $3.5 billion in 2010 and wanted to convert it into sterling to distribute cash to shareholders.Cairn+ had selected HSBC to conduct the forex conversion transaction from amongst ten banks it had asked to bid for the right while asking them to sign a `confidentiality agreement` regarding the information about the transaction.The US Department of Justice said that the two have been charged with conspiring to defraud a client of HSBC through a scheme commonly referred to as `front running` — a practice in which traders fraudulently conduct trades with advance information about an impending deal.
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