Mark Johnson ,a former HSBC FX trader was sentenced to two years in prison by US District Judge Nicholas Garaufis in Brooklyn, New York.
Johnson, who left his position as HSBC’s Global Head of Foreign Exchange in 2017, was taken directly to prison from court. US prosecutors had sought a seven-year prison term for Johnson but Judge Garaufis reduced the sentence to two, citing Johnson’s prior community work and noting that he would be separated from his family in the UK.
The sentence stems from a December 2011 deal between HSBC and Cairn Energy Plc. Cairn, a UK-based oil and gas exploration, and development company, which hired HSBC to convert $3.5 billion from dollars to pounds.
Leading the FX team at HSBC, Johnson promised to perform the transaction in small, regular amounts. The purpose of this was to prevent a spike in the exchange rate.
Instead, HSBC traders deliberately increased the value of the pound just prior to the transaction. This meant that Cairn paid an artificially high price for the transaction.
Prosecutors claimed that Johnson and another former HSBC executive, Stuart Scott, were responsible for the fraudulent behavior, known in industry terms as ‘front-running’. The two traders falsely told Cairn that the spike in the pound’s value was due to an order from the Russian Central Bank.
Source: Finance Magnates
Original post: Former HSBC Trader Sentenced to Two Years in Prison over Front-Running Scam
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