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1-min read

Ex-HSBC Bank Foreign Exchange Executive Gets 2 Years in Prison

Johnson and a co-defendant misused confidential information given to them by a client who wanted the bank to execute a foreign exchange transaction related to the planned sale of part of its ownership interest in an Indian subsidiary in 2011, according to authorities.

PTI

Updated:April 28, 2018, 8:48 AM IST
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Ex-HSBC Bank Foreign Exchange Executive Gets 2 Years in Prison
The HSBC headquarters in London. (Image for representation only. Photo: Reuters)
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New York: The former head of HSBC Bank's foreign exchange cash trading was sentenced on Thursday to two years in prison on charges he traded ahead of his customers to make millions of dollars in a scheme known as "front running."

"Mark Johnson exploited confidential information and betrayed a client in order to generate profits for HSBC and enrich himself," said U.S. Attorney Richard Donoghue.

"Johnson has been held accountable for his crimes and today's sentence should serve as a deterrent to fraudsters seeking to cheat their victims." Johnson, 51, a United Kingdom citizen, was sentenced in Brooklyn federal court after being convicted in October 2017 of wire fraud conspiracy and wire fraud. He also must pay a USD 300,000 fine.

Johnson and a co-defendant misused confidential information given to them by a client who wanted the bank to execute a foreign exchange transaction related to the planned sale of part of its ownership interest in an Indian subsidiary in 2011, according to authorities.

Prosecutors say Johnson and other traders they directed bought British Pound Sterling for HSBC's "proprietary" accounts prior to converting about $3.5 billion in sales proceeds on behalf of the client into British Pound Sterling, knowing the large transaction would boost the price of the pound.

This enabled them to generate roughly USD 7.3 million, some of it illegally, to the benefit of HSBC and at the expense of their client, authorities said.

During the trial, Johnson insisted the client got a fair price and that HSBC was only "pre-hedging" the trade. Johnson's lawyer, Mark Wohl, said they intend to appeal.

The bank wasn't accused of any wrongdoing. The co-defendant is in the U.K. fighting extradition.

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| Edited by: Ahona Sengupta
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