Jessica Fino 27 Apr 2018 01:01pm

Former HSBC trader jailed for two years

A British former HSBC trader has been sentenced to two years in jail after being found guilty of fraud in a $3.5bn (£2.5bn) trade on behalf of Cairn Energy

Mark Johnson, former head of HSBC Bank foreign exchange cash trading in the US, is the first person to be imprisoned as part of a global crackdown on currency rigging, according to a Bloomberg report.

The US district judge, Nicholas Garaufis, rejected Johnson’s request to serve the sentence in the UK.

He had been found guilty on nine counts of fraud in October last year, from which he and co-conspirators raised more than $7m (£5.08m).

“Johnson has been held accountable for his crimes and today’s sentence should serve as a deterrent to fraudsters seeking to cheat their victims by manipulating important benchmarks, such as the FX spot fixings,” US attorney Richard Donoghue said, according to the Financial Times.

Johnson’s lawyers said they would be appealing the decision.

In 2011, Johnson exploited information relating to the sale of Cairn’s foreign subsidiaries and ramped up the required $3.5bn pound sterling conversion in a way in which he and his co-conspirators could profit from.

Shortly before the trade, Johnson and his co-conspirators took out proprietary positions on pound sterling, using the knowledge of the deal from the confidential information obtained from their client.

As part of the fraud, Johnson and his co-conspirators misrepresented information to Cairn Energy to conceal their deceit – generating $7.3m (£5.3m) in profits.

Johnson was found guilty of eight counts of wire fraud and one count of conspiracy to commit wire fraud.

He was arrested in July 2016 and indicted a month later.