A former HSBC Holdings PLC (LON:HSBA) executive has been found guilty in the US of defrauding client Cairn Energy in a US32.5bn currency deal in 2011.
Mark Johnson, who was the head of HSBC’s global foreign exchange cash trading, had schemed to increase the price of sterling before converting US$3.5bn into pounds for Cairn resulting in a benefit to HSBC, according to US prosecutors.
The UK citizen faces up to 20 years in prison after he was found guilty on nine counts. He will be sentenced at a later date.
Johnson was arrested in New York last year on claims that he and UK banker, Stuart Scott, had bought sterling in advance of its deal with Cairn to inflate the currency’s value and make about US$8bn in fees and profits for HSBC.
Cairn used HSBC to handle the conversion into sterling of US$3.5bn in proceeds from the sale of one of its subsidiaries.
The US Department of Justice is seeking the extradition from the UK of Scott on the same charges. Scott, who denies the charges, will face a London magistrates’ court this week when his fate will be decided.
Speaking outside the courtroom after the ruling on Monday, Johnson’s attorney John Wing said: “They've convicted an innocent man.”
Johnson’s defence team insisted the Cairn were aware advance trades would be made and that recorded telephone calls .
The case is related to wider investigations by the DoJ and UK authorities into the manipulation of foreign exchange markets.
HSBC is not charged in the lawsuit and declined to comment.