City profiles

Mark Johnson The conviction of the former HSBC banker for fraud in New York is “a landmark legal decision” with “farreaching implications” for the $5.3trn-a-day foreign exchange market, said the FT. Mark Johnson, formerly the bank’s head of global cash forex trading, faces a possible 20 years in a US jail after being found guilty of nine counts of defrauding Cairn Energy, the Edinburghbased oil and gas company, in a $3.5bn currency deal. The case is related to a wider investigation into forexrigging, which has so far cost banks globally nearly $10bn in fines. But it was the first in the US to target individuals.

Johnson was arrested in dramatic fashion by the FBI at New York’s JFK airport in July last year. A second Briton, Stuart Scott, who was HSBC’S head of currency trading in London, is now resisting extradition on the same charges. According to prosecutors, Johnson and Scott “schemed to ramp up” the price of sterling before executing a trade for their client Cairn – thus “making millions for HSBC at Cairn’s expense”, said Fortune. This practice of “front-running” was once commonplace in the City and on Wall Street. Jurors were repeatedly played a taped excerpt of a phone call in which Johnson learned of Cairn’s decision to press ahead with the trade despite its rising cost. “Ohhh f***ing Christmas,” he said. “The verdict is likely to echo worldwide,” said Bloomberg – not least because it rams home the controversially long-reach of US law enforcers. This trade, after all, was “executed primarily in London” between two British companies. Johnson plans to appeal. “They’ve convicted an innocent man,” says his lawyer.