Cairn Energy said to be victim at centre of HSBC exec arrest

The unidentified victim at the centre of the arrest of HSBC executive Mark Johnson was Cairn Energy, when the British oil explorer sold its Indian unit to Vedanta Resources in 2011, according to people familiar with the transaction.

Bloomberg News reports that HSBC was commissioned to convert $3.5bn of the sale proceeds into British pounds, according to court documents unsealed in New York. Johnson, HSBC’s global head of foreign exchange cash trading in London, and colleague Stuart Scott, the former head of currency trading in Europe, used knowledge of the trade to front-run the order, making $8m for the firm, the filings say. They allegedly profited by buying pounds and instructing colleagues to do the same, knowing that the exchange rate would spike after the transaction was processed.

“Ohhhh, f***ing Christmas,” Johnson said in a phone call with Scott at 2:28 p.m. in London on Dec. 7, 2011, after being told that Cairn had authorized the bank to buy 2.25 billion pounds.

To access the complete Bloomberg News article hit the link below:

Cairn Energy Said to Be Victim of HSBC Currency Frontrunning

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