Banking giant HSBC has said police were investigating an alleged £70 million attempted fraud at the group.

The bank said no customer funds were involved and no money was lost in the alleged fraud.

It is believed the investigation comes after the HSBC uncovered unusual activity within its securities services division. An HSBC spokesman said: "HSBC is co-operating fully with a police investigation into an alleged fraud at the bank. No customer funds were involved and no transactions were disrupted. No customer or bank funds were lost in the alleged fraud."

City of London police said Jagmeet Channa (25), of Ilford, was charged with conspiracy to defraud, money laundering and abusing a position of trust on April 25. He has been remanded in custody until June 25, when he will appear at Southwark Crown Court.

Three other men aged 26, 33 and 38 remain on police bail in connection with the investigation.

The alleged attempted fraud at HSBC comes at a sensitive time for the banking sector, just months after French bank Societe Generale alleged that trader Jerome Kerviel lost it 4.9 billion euros (£3.8 billion), followed a month later by Credit Suisse’s admission that some of its traders had caused pricing errors leading to a 2.85 billion US dollar (£1.4 billion) writedown.

Credit Suisse found internal controls to detect or prevent misconduct had failed and unveiled a series of measures to offer increased protection.

The sector’s regulator, the Financial Services Authority, last year appointed a 25-strong financial crime team as part of a clamp down on wrongdoing in the industry.

The City watchdog is also battling against rising incidents of market abuse in the banking sector, revealing earlier this week that more than a quarter of all UK mergers and acquisitions in 2006 and 2007 involved potential insider dealing.

It launched an investigation last month into suspicious trading tactics as Halifax Bank of Scotland became a victim of rumours over its funding position and plans for a rights issue amid allegations that traders were deliberately spreading false information and profiting on the back of it.