Former-HSBC FX Head Facing Trial for Exploiting Currency Trades

Johnson has come under fire over his Cairn Energy trade, stating the process was like “f***ing Christmas”.

Former HSBC foreign exchange head Mark Johnson has come under fire after being accused of mishandling and exploiting confidential information. The ex-Global Head of FX Trading is due to face trial following a four-week process, per an FT report.

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The case holds particular relevance for future indictments given the legality surrounding Mr. Johnson’s behavior. As such, the fallout could serve as a litmus test for future currency manipulation cases. Mr. Johnson was seized at JFK airport despite being a UK citizen.

Standard practice or fraud?

Prosecutors are taking a hardline stance against Johnson, arguing that he lied to his client to exploit the information and make more money. Cairn Energy had previously hired HSBC to convert the proceeds from an asset sale in India from USD into GBP.

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However in doing so, Mr. Johnson allegedly orchestrated a scheme to opportunistically seize on a rise in the currency by buying GBP ahead of the transaction, consequently netting the bank millions of dollars.

In a particularly damning statement, prosecutors noted Mr. Johnson’s statement regarding the Cairn trade – that was like “f***ing Christmas”. Prosecutors also claimed that he discussed how high the currency prices could go before Cairn would later “squeal”.

The allegations against Mr. Johnson have faced some measure of resistance however, with his lawyer Frank Wohl asserting his standards were par for the industry. He is denying all charges, which allege that he ran a $3.5 billion currency deal that saw him exploit information from the FTSE 250 oil and gas group Cairn Energy.

Over the next four weeks he will sit in a string of trials. His legal team has pushed back on Mr. Johnson’s aforementioned remarks, claiming that the prosecution is simply cherrypicking words.

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