Moore Trader Tipped On Major Currency Deal, HSBC Says Nov 26 2014 | 1:56pm ET A senior HSBC trader tipped a Moore Capital Management trader about an enormous foreign-exchange transaction linked to a deal done by the bank, it told U.S. and British authorities. HSBC alerted the U.S. Justice Department and U.K. Financial Conduct Authority about the alleged leak several weeks ago. The former has now launched an investigation into the matter, The Wall Street Journal reports. The tip allegedly occurred while HSBC was working on Prudential’s acquisition of American International Group’s Asian life-insurance business in 2010. While the deal wasn’t a secret, how Pru planned to pay for it was, selling billions of British pounds to raise dollars to cover it. The senior trader—who was not one of the two currency traders fired by HSBC over a scandal that recently cost the bank US$620 million in settlements, neither of whom worked on the Pru deal—both allegedly traded ahead of Pru and notified the Moore trader. Pru’s currency transaction contributed to a then-mysterious 3% drop in the pound’s value against the dollar. The incident emerged as part of HSBC’s ongoing review of its currency-trading operations, required by its deals with U.S. and British authorities. The FCA is not investigating the matter further, and the U.S. probe is part of a larger criminal investigation. It’s not clear that the HSBC trader erred in notifying the Moore trader: The Journal reports that it is not unusual for banks to discuss such huge transactions with major trading partners, in hopes that they might be able to help complete them. But if it or any other action rises to the criminal, it could be a big problem for HSBC: Under a 2012 deferred-prosecution agreement to settle money-laundering allegations, the bank faces huge penalties if it is found to have violated U.S. law again.