FBI arrests senior HSBC banker accused of rigging multibillion-dollar deal
Rupert Neate in New York and Jill Treanor in London, 20 July 2016
Mark Johnson and a colleague allegedly defrauded clients and ‘manipulated the foreign exchange market to benefit themselves and their bank’
A senior HSBC banker has been arrested by the FBI as he attempted to board a transatlantic flight and charged him with fraudulently rigging a multibillion-dollar currency exchange deal.
Mark Johnson, a British citizen and HSBC’s global head of foreign exchange trading, and a colleague are accused of “defrauding clients” and alleged to have “corruptly manipulated the foreign exchange market to benefit themselves and their bank”.
He was arrested on Tuesday night shortly before he was due to fly to London from New York’s JFK airport, and was due to be formally charged by a judge at Brooklyn federal court later on Wednesday. He was later released on bail.
A second Briton, Stuart Scott, who was HSBC’s European head of foreign exchange trading in London until December 2014, is accused of the same crimes. A warrant was issued for Scott’s arrest.
They are the first people to be charged in connection with the US government’s long-running investigation into bankers’ alleged rigging of the $5.3tn (£4tn) per day forex market.
“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said the US assistant attorney general Leslie Caldwell. “This case demonstrates the [US Department of Justice’s] criminal division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”
Royal Bank of Scotland has handed the City regulator messages sent by one of its former traders in the latest twist in an investigation into potential manipulation of currency rates.
HSBC was guilty of a “blatant failure” to implement anti-money laundering controls and wilfully flouted US sanctions, American prosecutors said, as the bank was forced to pay a record $1.9bn (£1.2bn) to settle allegations it allowed terrorists to move money around the financial system.