U.S. trial set to begin for ex-HSBC executive in foreign
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[September 18, 2017]
By Brendan Pierson
NEW YORK (Reuters) - A former high-ranking
HSBC Holdings Plc executive from Britain on Monday will become the
first person to go to trial on charges stemming from a U.S. probe into
foreign exchange rate manipulation.
Selection of jurors for the trial of Mark Johnson, a 51-year-old British
citizen, is scheduled to begin before U.S. District Judge Nicholas
Garaufis in Brooklyn. Johnson, who was HSBC's global head of foreign
exchange cash trading, has pleaded not guilty to wire fraud and
HSBC spokesman Robert Sherman said Johnson left the bank earlier this
year. "The case will be against Mark Johnson, not HSBC," he said. A
lawyer for Johnson could not immediately be reached.
The case came in the wake of worldwide investigations that have resulted
in about $10 billion in fines for several large banks and the firing of
dozens of traders.
In 2011, Johnson and another HSBC executive, Stuart Scott, misused
information from a client that hired the bank to convert $3.5 billion
into British pounds as part of the client's planned sale of foreign
subsidiaries, according to U.S. prosecutors.
Armed with knowledge of the deal, Johnson and Scott entered into foreign
currency transactions that caused the price of pounds to spike,
generating more profit for HSBC while hurting the client, prosecutors
said. Transactions that are 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
British oil firm Cairn Energy Plc.
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Mark Johnson, a British citizen who at the time of his arrest was
HSBC's global head of foreign exchange cash trading, exits following
a hearing at the U.S. Federal Court in Brooklyn, New York, U.S.,
August 29, 2016. REUTERS/Brendan McDermid
HSBC earned $3 million in total from Johnson and Scott's foreign currency
transactions, and $5 million from executing the deal for the client, prosecutors
Scott, who was HSBC's head of cash trading for Europe, the Middle East and
Africa, lives in the United Kingdom, and U.S. authorities are seeking his
Scott left HSBC in 2014, according to Sherman, the bank's spokesman. Scott has
denied the accusations. His lawyers could not be reached immediately for
At least four other people have been charged in connection with the U.S.
investigation of currency market rigging.
Chris Ashton, Rohan Ramchandani and Richard Usher, who worked at Barclays Plc,
Citigroup Inc and JPMorgan Chase & Co, respectively, all pleaded not guilty to
U.S. charges in July.
In January, former Barclays trader Jason Katz pleaded guilty to conspiring to
fix currency prices, becoming the first person to admit wrongdoing.
The case is U.S. v. Johnson et al, U.S. District Court, Eastern District of New
York, No. 16-cr-00457.
(Editing by Jeffrey Benkoe)
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