Trial of British forex banker starts in New York
A former high-ranking HSBC banker became the first person to go to trial on charges stemming from a US investigation into foreign exchange rate manipulation on Monday.
Selection of jurors for the trial of Mark Johnson, a 51-year-old British citizen, began in Brooklyn, New York.
Mr Johnson, who was HSBC’s global head of foreign exchange cash trading, has pleaded not guilty to wire fraud and conspiracy charges. An HSBC spokesman said Mr Johnson left the bank earlier this year. “The case will be against Mark Johnson, not HSBC,” he said.
The case came in the wake of worldwide investigations that have resulted in about $10bn (£7bn) in fines for several large banks.
In 2011, Mr Johnson and Stuart Scott, HSBC’s then head of cash trading for Europe, the Middle East and Africa, misused information from a client that hired the bank to convert $3.5bn into British pounds as part of the client’s planned sale of foreign subsidiaries, according to US prosecutors.
Armed with knowledge of the deal, Mr Johnson and Mr Scott entered into currency transactions that caused sterling to spike, generating more profit for HSBC while hurting the client, prosecutors said. Transactions based on advance knowledge of a deal are known as “front-running”.
The client was not named in court papers, but a source has said it was oil firm Cairn Energy.
HSBC earned $3m in total from Mr Johnson and Mr Scott’s transactions, and $5m from executing the deal for the client, prosecutors said. US authorities are seeking the extradiction of Mr Scott, who left HSBC in 2014. He has denied the accusations.
