Sep 12, 2019

Former HSBC forex chief loses appeal over US conviction

Mark Johnson, HSBC's former chief currency dealer, lost his appeal against his conviction in the US for wire fraud over a foreign-exchange deal involving Cairn Energy. Johnson was convicted by a New York court in 2017 for defrauding the Scottish energy company over a $3.5bn transaction in 2011 in which HSBC was hired to convert the proceeds of an asset sale from dollars to sterling. The US Court of Appeals for the Second Circuit ruled that there was sufficient evidence for a jury to conclude that Johnson had deprived Cairn of the ability to make proper economic decisions and that he had made material misrepresentations to the company. Prosecutors at his jury trial argued that using code phrases such as "My watch is off", Johnson tipped off colleagues who traded for the bank itself before processing its client's order in what amounted to front-running. The DoJ has fared less well in cases against other British traders, with the Lord Chief Justice of England and Wales last year ruling that it was not in the interests of justice to extradite Johnson's alleged co-conspirator, Stuart Scott.

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