Former HSBC executive, Mark Johnson was found guilty fraud by a U.S. jury. The ruling stated that he had defrauded a client, Cairn Energy, in a 2011 currency trade.
The lawsuit is linked to a larger investigation into global currency markets. The initiative came after many banks admitted to manipulating foreign currency markets.
However, the suit was first brought to the U.S. to target individuals. Such as, Mark Johnson, who was former head of HSBC’s global foreign exchange cash trading. Mr. Johnson was arrested in New York in 2016.
The U.S. is also seeking to extradite Stuart Scott, another UK banker.
Prosecutors said that Cairn, which is an Edinburgh- based company began its relationship with HSBC in 2011. The company desired HSBC to handle conversion of the $3.5 billion it received from a sale.
Prosecutors also stated that Mr. Johnson schemed to increase the price of sterling before converting the $3.5 billion into pounds for Cairn. This in turn created a huge loss for Cairn and a big gain for HSBC.
The prosecution built its case on certain telephone recordings between the parties. They alleged that Mr. Johnson and Mr. Scott bought sterling before the deal, thus inflating the currency’s value.
The move, made on HSBC’s behalf, resulted in a profit of approximately $8 million for the bank. The defense argued that Cairn was aware that advance traders would occur. Mr. Johnson claimed his comments were taken out of context.
Speaking after the jury’s verdict, Mr. Johnson’s attorney stated that his client was an “innocent man”. Both Mr. Johnson and Mr. Scott claim they are innocent.
Their former employer, HSBC is not charged in the case and has declined to comment on the proceedings.