A claim against HSBC for allegedly misusing confidential information about currency trades more than 15 years ago is time barred, the High Court has ruled.
Specialist currency debt management firm ECU Group sued a number of entities within the HSBC Group over allegations that traders used knowledge of ECU’s foreign exchange orders to make a profit between 2004 and 2006, in a practice known as ‘front running’.
ECU also claimed HSBC breached its instruction not to trade ahead of certain FX orders, wrongfully added a margin to the rate at which they traded in the market and that certain traders wrongfully traded on their own account with knowledge of ECU’s orders.
At a trial on liability in June and July, ECU’s lawyers argued there had been ‘widespread misconduct’ on the part of HSBC and its FX traders and that there was a ‘culture of impunity’ at HSBC’s London trading desk, which was denied.
Giving judgment in ECU Group PLC v HSBC Bank PLC and others today, Mrs Justice Moulder held that ECU’s claims were time barred as the company had ‘sufficient knowledge’ to plead its case in 2006.
In relation to the front running claims, the judge said that ‘the inference of dishonest front running could have been pleaded in 2006’. Similarly, ECU had ‘sufficient knowledge’ to plead its case on allegations of adding a margin and breach of confidence in the same year.
Moulder said her ruling does not address ‘the more colourful submissions which were made on behalf of ECU’ – including an assertion of ‘lax moral standards’ at HSBC – which she held ‘were neither pleaded nor did they have any real evidential basis’.