Lots of people are talking about the Global Code of Conduct, but are they asking the right questions? Profit & Loss deputy editor, Galen Stops, discusses why incentives might be more important that enforcement mechanisms when it comes to ensuring adherence to the Code.
People are fond of “looking at the bigger picture” but when it comes to the legal profession and FICC markets, frankly the bigger picture confuses me. How else can we explain how a number of traders are facing jail time and yet so many other traders are winning their unfair dismissal cases? To me, the issue clearly highlights the level of collateral damage in the industry and requires the banks (and regulators to a degree) to have a serious reappraisal of their approach.
Written testimony has been lodged relating to former HSBC FX trading head Mark Johnson’s appeal against his conviction for wire fraud in the US and it contains a few surprises – some of which may indicate stronger implications for the FX industry than the original trial, as Colin Lambert discovers.The original trial of HSBC’s former global head of FX trading Mark Johnson was widely seen in the FX industry as being, aside from the outcome on his personal circumstances, a single issue case – what would the US legal system say about pre-hedging? The initial outcome – which is now being appealed – was a conviction and a jail sentence under the very broad umbrella of “wire fraud”, a decision that was seen as potentially having an impact on the FX Global Code, which explicitly (under certain circumstances), endorses the practice.