U.S. to seek ex-HSBC executive's
extradition from Britain
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[October 22, 2016]
By Nate Raymond
NEW YORK (Reuters) - The United States will
seek the extradition from Britain of a former HSBC Holdings Plc
executive accused of participating in a fraudulent scheme involving a
$3.5 billion currency transaction, prosecutors said on Friday.
In a letter filed in federal court in Brooklyn, prosecutors said the
U.S. government will initiate formal proceedings to seek Stuart Scott's
extradition after learning he did not wish to come to the United States
voluntarily to face the charges.
The U.S. Justice Department has begun the process of preparing an
extradition package for the State Department to submit to the United
Kingdom, the letter said.
A lawyer for Scott, who currently resides in Hertfordshire, England, did
not immediately respond to requests for comment.
Scott, HSBC's former head of cash trading for Europe, the Middle East
and Africa, was charged in July along with Mark Johnson, a British
citizen who was HSBC's global head of foreign exchange cash trading and
who was arrested in New York.
The men are believed to be the first individuals to face U.S. criminal
charges arising from a probe of foreign-exchange rigging at banks.
The probe led to four banks last year pleading guilty to conspiring to
manipulate currency prices. HSBC was not among those banks, but in 2014
agreed to pay $618 million to resolve related probes by U.S. and British
regulators.
The U.S. Justice Department has continued to investigate, and HSBC has
set aside $1.2 billion to cover various forex-related matters.
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Prosecutors said Johnson and Scott in 2011 misused information
provided by a client that hired HSBC to convert $3.5 billion to
British pounds in connection with a planned sale of the client's
foreign subsidiaries.
They then used their insider knowledge to trade ahead of the
transaction, causing a spike in the price of the currency that hurt
HSBC's client, prosecutors said.
The client was not named in court papers, but a source has said it
was British oil firm Cairn Energy.
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In total, HSBC earned $3 million from trades its currency traders
placed, and $5 million from executing the transaction, prosecutors
said.
Johnson has pleaded not guilty and is free on bail. Scott's lawyer
in Britain, Gerallt Owen, has said he denies the allegations.
The case is U.S. v. Johnson et al, U.S. District Court, Eastern
District of New York, No. 16-cr-00457.
(Reporting by Nate Raymond in New York; Editing by Tom Brown)
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