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Ex-HSBC executive sentenced to two years for foreign exchange scheme


Reuters NEW YORK
By Brendan Pierson
NEW YORK (Reuters) - A former HSBC Holdings Plc executive was sentenced to two years in prison on Thursday after he was found guilty by a jury of defrauding Cairn Energy Plc in a $3.5 billion currency trade in 2011.
Mark Johnson, formerly head of HSBC's global foreign exchange cash trading desk, was sentenced by U.S. District judge Nicholas Garaufis in Brooklyn, according to John Marzulli, a spokesman for U.S. Attorney Richard Donoghue. He was also ordered to pay a $300,000 fine.
Lawyers for Johnson could not immediately be reached for comment.
Johnson, a 52-year-old British citizen, was convicted of fraud in October after a nearly four-week trial. He was the first banker to be tried in the United States as a result of worldwide investigations of the multi-trillion-dollar per day currency market.
The probes have led to about $10 billion in fines against several banks and the firing of dozens of traders.
According to court filings, Cairn hired HSBC in 2011 to convert $3.5 billion into British pounds sterling in connection with the sale of an Indian subsidiary.
Prosecutors said that Johnson and another former HSBC executive who is also facing charges, Stuart Scott, devised a scheme to drive up the price of pounds by executing a series of trades before carrying out the trade for Cairn.
Such trading in advance of a client's order to make a profit is known as "front-running."
During the trial, jurors heard numerous tape recorded phone calls between Johnson and others discussing the trade.
In one call, Scott and Johnson told Cairn and its financial adviser after the trade that a "Russian buyer" had been responsible for a spike in the price of pounds. Prosecutors said that was a lie.
Scott, who was HSBC's former head of cash trading for Europe, the Middle East and Africa, remains in Britain. A London judge ruled last October that he be extradited to the United States to face charges, which Scott said he would appeal.
Johnson left HSBC in 2017 before his trial, and Scott left in 2014, according to an HSBC spokesman.
(Reporting by Brendan Pierson in New York; Editing by Dan Grebler)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Apr 27 2018 | 4:50 AM IST

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