What British HSBC banker arrested over alleged £2.7BILLION fraud ‘shouted as he and colleague made £6million profit’
Two top execs have been charged in the US for fraudulently making cash out of a multi-billion pound foreign currency deal
A BRITISH banker charged over a $3.5billion (£2.7billion) currency fraud allegedly shouted 'Ohhh, f*****g Christmas' as he and a colleague made a £6million profit.
Mark Johnson, 50, HSBC’s head of global foreign exchange cash trading, was arrested by the FBI as he tried to fly out of New York’s JFK airport to London on Tuesday.
The US Justice Department is charging him and ex-colleague Stuart Scott, HSBC’s former head of European currency trading, after a long running investigation.
Both appeared in court yesterday, charged with using inside information to make around $8million (£6.1million) out of a $3.5billion (£2.7billion) exchange.
Prosecutors said the executives, who are both British citizens, misused information provided to them by a client that had hired HSBC to convert $3.5billion to British pounds in connection with a planned sale of one of the unnamed company's subsidiaries.
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They are accused of arranging for an “unnamed victim” to buy $3.5billion worth of British sterling - which caused the value of the pound to spike.
Both execs allegedly bought sterling themselves before the deal went through.
They are accused of doing this, knowing the scale of the transaction would push up the value of the pound and make them - and their bank - money.
It is alleged they did this without their client knowing,also known as front-running.
They are also accused of billing their client $5million (£3.8million) in fees.
When the full order was authorised, Johnson was recorded on a telephone call as saying to Scott, 43, "Ohhhh, f***king Christmas," the documents allege.
Prosecutors quoted emails which indicated the two men plotted to see how high they could raise the dollar to pound exchange rate before the clients would “squeal”.
Both men appeared before in court in New York’s Brooklyn yesterday afternoon.
Robert Capers, US attorney for the Eastern District of New York, said: “…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.”
He added: “The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves.”
Assistant Attorney General Leslie Caldwell said the defendants allegedly “corruptly manipulated the foreign exchange market to benefit themselves and their bank”.
Scott joined HSBC in 2007, with his co-accused taking up a job there three years later.
In November 2014, HSBC was one of six banks fined by UK and US regulators over traders’ attempts to manipulate foreign exchange rates.
It took a £390million hit over the scandal involving the £3trillion a day foreign exchange market.
Scott was sacked by the bank the following month.
In 2007, he won an award from the FX Week magazine for his prowess in foreign currency trading.
Close to 40 per cent of the world’s currency dealing is believed to go through London’s trading rooms.
A spokeswoman for HSBC declined to comment last night.