A senior compliance executive at HSBC is being investigated by the UK markets watchdog.
Paul Watson, the head of regulatory compliance for HSBC’s global banking and markets division, was today reported to be subject to an ongoing and weeks-long inquiry by the Financial Conduct Authority.
The investigation, first reported by Sky News, is said to relate to Watson’s supervision of systems and controls in the UK lender’s investment banking unit and to be connected to a broader review of the bank’s compliance processes instigated by the FCA.
News of the inquiry comes just under two months after a group claiming to comprise senior members of HSBC’s investment bank penned an anonymous letter attacking the division’s boss Robin Phillips, and accusing him of overseeing a period of “persistent failure” and demanding his immediate removal.
A person familiar with the matter said there was no suggestion of any wrongdoing on Watson’s part, and that the investigation was unrelated to the letter.
The investigation also follows a drive by the FCA’s enforcement head Mark Steward to investigate more possible wrongdoing in the City — and not just the cases that are more likely to result in headline-grabbing fines.
Steward said in 2017 that the introduction of Europe’s new trading rulebook, or Mifid II, gave “the FCA wide discretion to act where there are serious concerns but not much hard evidence to really go on”.
He added: “We should act, diagnostically and remedially where we see harm or risk of harm in the context of our overall strategic objective to ensure our markets function well.”
Author: Lucy McNulty