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HSBC senior manager arrested by US DOJ over FX fraud conspiracy

HSBC HoldingsPlc's global head of foreign exchange cash trading, London-basedMark Johnson, was arrested in New York by the U.S. Department of Justice foralleged foreign exchange rigging, Bloomberg News reported July 20, citing"people familiar with the matter."

Johnson, who was charged with alleged conspiracy to commitwire fraud, is expected to appear in a federal court in Brooklyn the same day, accordingto the people. Johnson becomes the first individual to be charged in the DOJ'sthree-year investigation into global banks, regarding rigging currencybenchmarks, according to the Bloomberg report.

Stuart Scott, HSBC's former chief of cash trading forEurope, the Middle East and Africa, was charged along with Johnson, Reutersreported the same day. U.S. prosecutors claimed that Johnson and Scott, who wasfired by the Britishbank in late 2014, engaged in insider trading on information provided by anHSBC client that led to a spike in the value of the British sterling, which wasdetrimental to the bank's client.

The lender agreed to a $618 million payment to settle FXmanipulation allegations in November 2014. HSBC is still being investigated bythe DOJ and other authorities and has put aside $1.3 billion for potentialpenalties.

The U.S. Federal Reserve Board also Matthew Gardiner, who used towork as a foreign exchange trader with Barclays Plc and UBS AG, from working in banking for life.