Former HSBC banker found guilty of fraud

HSBC Canary Wharf

A US jury has found a former HSBC executive guilty of defrauding Cairn Energy in a 2011 currency trade.

Mark Johnson, who formerly headed up the bank’s head of global cash foreign exchange trading, was found to have orchestrated a scheme to ramp up the price of sterling ahead of a trade for the firm, raking in millions for HSBC.

Trading ahead of a client’s order to make a profit is known as front-running.

Read more: Former HSBC exec arrested in UK at request of US authorities

Johnson's lawyer, John Wing, told reporters as he left the courtroom: “They’ve convicted an innocent man.”

Johnson, who was on trial for nearly four weeks, will be sentenced at a later date.

In June, another UK banker, Stuart Scott, was arrested in the UK at the request of US authorities, for the case. He is fighting extradition and denies the charges.

Prosecutors said oil and gas firm Cairn had chosen HSBC in 2011 to handle the conversion of $3.5bn (£2.7bn) in proceeds from the sale of one of its subsidiaries, into sterling.

They alleged that Johnson and Scott, on behalf of HSBC, bought sterling ahead of the deal, inflating the currency’s value and ultimately netting a profit.

HSBC was not charged in the case.

The lawsuit is related to a wider investigation into global currency markets. The charges marked the first in the US Justice Department’s three-year investigation into foreign currency rigging.

Read more: HSBC's partnering with a fintech startup in its latest Open Banking push

Full story: Former HSBC banker found guilty of fraud: City A.M.

JefferiesAnd the Best Place to Work in the global financial markets 2018 is...

Register for HITC Business News