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FBI swoops on HSBC banker at JFK Airport over $8mn fraud charge | FBI swoops on HSBC banker at JFK Airport over $8mn fraud charge |
(about 1 hour later) | |
FBI agents arrested a senior HSBC banker minutes before he was due to board a flight to London and charged him with conspiracy to defraud a client of the bank to the tune of $8 million (£6 million). | |
Mark Johnson, 50, a British citizen and head of HSBC’s global currency exchange, was apprehended at New York’s JFK Airport shortly before he was due to fly to Britain. | Mark Johnson, 50, a British citizen and head of HSBC’s global currency exchange, was apprehended at New York’s JFK Airport shortly before he was due to fly to Britain. |
The US attorney’s office in Brooklyn, New York, filed a complaint against Johnson claiming he used privileged information provided by an unnamed “victim company” to conduct currency trades that benefited HSBC at the expense of its client. | The US attorney’s office in Brooklyn, New York, filed a complaint against Johnson claiming he used privileged information provided by an unnamed “victim company” to conduct currency trades that benefited HSBC at the expense of its client. |
Johnson was charged alongside a second Briton, Stuart Scott, who is HSBC’s former head of foreign exchange cash trading for Europe, the Middle East and Africa. | Johnson was charged alongside a second Briton, Stuart Scott, who is HSBC’s former head of foreign exchange cash trading for Europe, the Middle East and Africa. |
He was released on Wednesday on $1 million (£755,000) bail. | He was released on Wednesday on $1 million (£755,000) bail. |
Prosecutors have accused both men of buying sterling for HSBC’s “proprietary” accounts just before converting about $3.5 billion (£2.7 billion) in sales proceeds on behalf of the client into sterling, knowing this second transaction would increase the value of the pound. | Prosecutors have accused both men of buying sterling for HSBC’s “proprietary” accounts just before converting about $3.5 billion (£2.7 billion) in sales proceeds on behalf of the client into sterling, knowing this second transaction would increase the value of the pound. |
Called “front running,” prosecutors allege the underhanded trick enabled the defendants to generate $8 million (£6 million), some of it illegally and to the benefit of the banking giant, while at the expense of the client. | Called “front running,” prosecutors allege the underhanded trick enabled the defendants to generate $8 million (£6 million), some of it illegally and to the benefit of the banking giant, while at the expense of the client. |
US attorney for the Eastern District of New York, Robert Capers, said: “As alleged, 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.” | US attorney for the Eastern District of New York, Robert Capers, said: “As alleged, 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.” |
The criminal charges following the publication of a US House of Representatives committee report which revealed former UK Chancellor George Osborne and the UK financial regulator intervened in a US investigation into illegal activities by HSBC in 2012. | The criminal charges following the publication of a US House of Representatives committee report which revealed former UK Chancellor George Osborne and the UK financial regulator intervened in a US investigation into illegal activities by HSBC in 2012. |
According to the report, prepared by Republicans, the US Department of Justice (DOJ) considered criminal charges in addition to a £1.2 billion (US$1.6 billion) fine it levied in December 2012, but dropped the prosecution after coming under pressure from Osborne. | According to the report, prepared by Republicans, the US Department of Justice (DOJ) considered criminal charges in addition to a £1.2 billion (US$1.6 billion) fine it levied in December 2012, but dropped the prosecution after coming under pressure from Osborne. |
The allegations against Johnson also come after several banks have paid out about $10 billion in penalties to the UK, US and other authorities over allegations traders attempted to fix the forex market, which is worth $5 trillion a day. | The allegations against Johnson also come after several banks have paid out about $10 billion in penalties to the UK, US and other authorities over allegations traders attempted to fix the forex market, which is worth $5 trillion a day. |
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