A former HSBC banker has been found guilty of defrauding a client in a $3.5 billion (£2.6 billion) currency deal.
A British citizen, Mark Johnson faces up to 20 years in prison after being found guilty on nine counts in New York, the Financial Times has reported.
Johnson was HSBC’s head of global cash foreign exchange trading and has been accused by US authorities of exploiting confidential information from Cairn Energy. The oil and gas company had hired HSBC to convert the proceeds of an asset sale from dollars to pounds.
The prosecutors said that Johnson created a scheme to deal for HSBC before trading on behalf of the client and made illicit profits of over $7 million.
According to the FT, Johnson’s defence was that pre-hedging was a standard practice in the industry. He claimed that Cairn still got a fair price.
The US Department of Justice is also working to extradite one of Johnson’s former colleagues from the UK, Stuart Scott, on the same charges.
Scott was head of HSBC’s currency trading in London and has been resisting extradition while denying the charges.
He will appear at a London magistrates’ court this week.
'We are working vigorously to ensure integrity is upheld in financial services industries. We will continue to work with our law enforcement partners to investigate and prosecute those who engage in illegal business practices,' Andrew Vale, assistant director at FBI's Washington field office, said.