US: HSBC trader defends his actions in US$3.5b FX deal

Former HSBC Holdings currency trader Mark Johnson took the witness stand on Thursday, October 12,  insisting that he cheated no one in a US$3.5 billion foreign-exchange transaction.

Johnson is accused of fraud for buying British pounds ahead of a client’s order, forcing the client to pay a higher price. The bank made an US$8 million profit as a result of the currency spike, according to prosecutors.

Prosecutors say Johnson and Stuart Scott, then HSBC’s head of foreign exchange cash trading in Europe, bought pounds in the days ahead of the transaction and also tipped off traders at the bank to make purchases.

Testifying in his own defense is risky for Johnson, who faces prison time if he’s convicted. After questioning by his lawyer, Johnson will be cross-examined by US prosecutors who will likely ask him about recorded calls they played during the trial. He had recapped the bank’s trading that day as a “bonanza,” predicting it would boost compensation for his team.

Full Content: Financial Times

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