An ex-HSBC banker has been found guilty by a US jury of defrauding an energy company in a $3.5bn currency trade in 2011.
Prosecutors said British citizen Mark Johnson, former head of the bank’s global foreign exchange cash trading desk, plotted to ramp up the price of sterling before executing a trade for Cairn Energy – making millions for the lender at the company’s expense.
The 51-year-old was the first banker to be tried in the US as a result of worldwide investigations into the wider multi-trillion dollar per day currency market.
Investigations into this market have led to about $10bn in fines against several banks and the firing of dozens of traders.
John Wing, a lawyer for Johnson, 51, said following the verdict in a New York federal court: “They’ve convicted an innocent man”
According to court filings, Cairn hired HSBC in 2011 to convert $3.5bn into pounds in connection with the sale of an Indian subsidiary.
Prosecutors said Johnson and another former HSBC executive, Stuart Scott, who is also facing charges, devised a scheme to drive up sterling by executing a series of trades before carrying out the trade for Cairn.
The practice of such trading in advance of executing a client’s order is known as “front-running”.
During the trial, jurors heard tape-recorded phone calls between Johnson and Scott discussing the trade.
A lawyer for Scott, who is in Britain and fighting extradition, declined to comment.
A spokesman for HSBC in London declined to comment.
Source: Sky News