The U.S. Commodity Futures Trading Commission (CFTC) recently issued an order against HSBC Bank USA, N.A. (HSBC), a temporary registered swap dealer, along with charges and a settlement with it. The order accuses HSBC of manipulative and deceptive trading practices in swaps with bond issuers, as well as regulatory and mobile-device record-keeping failures at various times over a period of about eight years.

The CFTC found that HSBC violated the relevant provisions of the Commodity Exchange Act at various times between approximately March 2012 and July 2020.

HSBC was ordered to pay a $45 million civil penalty; Cease and terminate further violations of the anti-fraud, anti-manipulation, monitoring, and record-keeping provisions of the Commodity Exchange Act; And implement specific remedial measures. HSBC said it has taken and will continue to take substantial remedial measures.

Ian McGinley, Director of Enforcement, said: "The CFTC has zero tolerance for manipulative and deceptive trading practices, including by registered swap dealers. Registrants need to take their oversight responsibilities seriously to prevent this from happening. Today's order makes clear that the CFTC will continue to vigilantly investigate and prosecute breaches of market integrity and fraud, and work to protect all market participants, including swap counterparties, from abusive practices."