UK banker found guilty of $3.5bn currency deal fraud

Mark Johnson, a former HSBC bank’s head of global cash foreign exchange trading,  has been found guilty of defrauding a client on nine counts, in a $3.5bn currency deal,  and face up to 20 years in prison, according to a spokesman for US prosecutors. But the British citizen was found not guilty on one other count. This landmark legal decision could have far-reaching implications for the working s of the $5.3tn-a-day currency market.

Johnson was accused of exploiting confidential information from Cairn Energy, the UK oil and gas company, which hired HSBC to convert the proceeds of an asset sale from dollars to Sterling. Johnson allegedly concocted a scheme to deal for HSBC, before trading on behalf of the client, tipping off colleagues through code phrases such as “my watch is off” and netting a $6m profit. Jurors were played the recording of the tape in which Johnson learned of Cairn’s decision to proceed with the trade despite a rising price.

They also heard a tape of Mark Johnson saying “ Oh f**king Christmas” on learning of Cairn Energy’s decision to press ahead with the trade.