HSBC Bank’s chief of foreign exchange cash trading arrested

Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, was arrested at John F. Kennedy International airport on Tuesday, according to media reports.

HSBC Bank’s head of foreign exchange cash trading has been arrested in NY on charges he traded ahead of his customers to make millions of dollars.

Johnson is scheduled to be arraigned on charges of conspiracy to commit wire fraud in Brooklyn federal court on Wednesday morning. When Scott told Johnson the client was still going ahead with the full transaction despite the spiking price, Johnson said “Ohhhh, f***ing Christmas”, according to the complaint.

“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank”, said the U.S. assistant attorney general Leslie Caldwell.

There was no immediate information on an attorney who could comment for him.

The US Department of Justice said Mark Johnson, 50, allegedly conspired to defraud an HSBC client through a “front running” scheme. Johnson is a United Kingdom citizen and US resident.

“Authorities allege that in 2011, Johnson and Scott misused information provided by a client about a future currency transaction, and made earlier trades that caused the client’s “$3.5 billion foreign exchange transaction to be executed in a manner that was created to increase the price of the pound sterling, to the benefit of HSBC and at the client’s expense”. “Before that, he was global head of trading at Deutsche Bank”.

The case is related to a years-long U.S. Justice Department probe of foreign-exchange rigging at global banks, and marked the first time U.S. prosecutors had brought criminal charges against individuals, a person familiar with the matter said.

HSBC reported last August that it had set aside $1.3bn for possible settlements to cover costs related to ongoing legal investigations. The order banning Gardiner said that he is cooperating with authorities, providing testimony, documents, records and other evidence against other bankers.

The arrests follow major enforcement cases against big banks over rigging of the foreign exchange market. He hasn’t been publicly charged and it isn’t clear if he has been granted immunity for cooperation.