Mark Johnson guilty: Former HSBC banker convicted in $3.5m fraud case

Alicia Cross
October 24, 2017

A former currency trader at HSBC faces up to 20 years in federal prison after being found guilty of executing trades in a way that drove up costs for a client.

Johnson, who was on trial for almost four weeks, will be sentenced at a later date.

At the same time Johnson was charged with the crime previous year, Stuart Scott, another former HSBC trader who lives in the United Kingdom, was also charged.

The lawsuit is related to a wider investigation into global currency markets. The charges marked the first in the US Justice Department's three-year investigation into foreign currency rigging. He has been free on bail during the trial and remains free, despite Monday morning's conviction. In closing arguments, defense lawyer John Wing said prosecutors hadn't found "evidence of anything remotely close to criminal conduct".

In the front-running scam, Johnson and a co-worker, Stuart Scott, bought British pounds from a bank's account ahead of a giant Cairn order - those falsely inflating the price of the currency and the fees paid by Cairn.

A sentencing date hasn't been set.

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When Cairn noticed the rising price of the pound that day, another HSBC employee blamed it on purchases by a "Russian buyer", according to evidence presented at trial.

His defence team argued that Cairn was aware that advance trades would occur and said his comments were taken out of context. A lawyer for Mr. Scott couldn't immediately be reached for comment.

A former HSBC banker facing charges of fraudulently rigging a multi-billion dollar currency exchange deal was today convicted of fraud in a NY court.

The firm has said it is in talks with United States regulators to resolve an investigation of its foreign exchange trading.

Earlier in October, the U.S. Federal Reserve fined HSBC $175 million for failing to adequately supervise its foreign-exchange trading business, citing the alleged conduct by Messrs.

Prosecutors had charged that in 2011, Johnson ran a scheme to profit off a giant order by one of HSBC clients, the oil and gas company Cairn Energy.

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