Sunday 25 September 2016

Senior HSBC executive arrested on wire fraud conspiracy charges

Published 20/07/2016 | 21:31

Mark Johnson, 50, allegedly conspired to defraud an HSBC client through a
Mark Johnson, 50, allegedly conspired to defraud an HSBC client through a "front running" scheme

HSBC's head of global foreign exchange cash trading has been arrested and charged in the US for allegedly conspiring to commit wire fraud.

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The US Department of Justice said Mark Johnson, 50, allegedly conspired to defraud an HSBC client through a "front running" scheme.

Stuart Scott, 43, HSBC's former head of foreign exchange cash trading for Europe, the Middle East and Africa, has also been charged.

They are accused of misusing information in 2011 "provided to them by a client that hired HSBC to execute a foreign exchange transaction related to a planned sale of one of the client's foreign subsidiaries."

The two men allegedly generated 8 million US dollars (£6 million) in profits from the transaction.

Robert Capers, US attorney for the Eastern District of New York, said: " As alleged, the defendants placed personal and company profits ahead of their duties of trust and confidentiality owed to their client, and in doing so, defrauded their client of millions of dollars."

Mr Johnson was arrested at the JFK International Airport in Queens, New York, on Tuesday, the US Justice Department said.

He has been released on 1 million dollar (£755,000) bail and will face a court appearance on Wednesday before magistrate judge Lois Bloom of the Eastern District of New York.

A lawyer for Mr Johnson declined comment.

Assistant attorney general Leslie Caldwell said: "The defendants allegedly betrayed their client's confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank."

She added: "This case demonstrates the criminal division's commitment to hold corporate executives, including at the world's largest and most sophisticated institutions, responsible for their crimes."

HSBC declined to comment.

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