FX Currency Frauds and California Qui Tam
Whistleblower James Connolly successfully used the California False Claims Act to hold the multinational bank and financial services company HSBC accountable for overcharging the California Public Employees Retirement System in foreign currency trading. The whistleblower exposed a complex scheme used by HSBC to overcharge the state retirement funds for FX Euro and British Pound transactions resulting in the loss of millions of dollars in pension funds. These losses directly impacted the funds available to pay retired California firefighters, police, and other public employees.
The case settled for a $7 million payment to the California, plus the attorney fees and costs incurred by the whistleblower. The whistleblower share of the sanction was $1.12 million. The whistleblower obtained
California Attorney General Xavier Becerra explained the significance of the qui tam whistleblower law suit: “When you retire from public service, every dollar of your pension counts,” said Attorney General Becerra. “We’re holding HSBC accountable for cheating California state pensioners out of their money. No doubt $7 million counts a lot.”
This case demonstrates the wide scope of the False Claims Act and the importance of incentivizing whistleblowers. Whistleblower James Connolly was able to use his knowledge of complex financial and foreign currency transactions to demonstrate a loss to a state pension fund. This unique use of the False Claims Act demonstrates the potential scope of False Claims Act laws, and the importance of identifying the financial losses that usually underscore all frauds.
Read the Settlement Agreement.
Read the Press Release issued by the California Attorney General.