Corporate Watchdog Group Applauds Arrest of HSBC Official Mark Johnson – this is a big charge for a bank which keeps on getting in trouble for related offenses – interestingly (it could be there is no connection but still of note – the DOJ was just recently hammered for not going after HSBC Bank for political reasons according to a Congressional report)- First the statement from the DOJ on this matter:
The head of global foreign exchange cash trading at HSBC Bank plc, a subsidiary of HSBC Holdings plc (collectively HSBC), and HSBC’s former head of foreign exchange cash trading for Europe, the Middle East and Africa were charged with conspiring to defraud a client of HSBC through a scheme commonly referred to as “front running.”
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Robert L. Capers of the Eastern District of New York, Acting Inspector General Frederick W. Gibson of the Federal Deposit Insurance Corporation (FDIC) and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office made the announcement.
Mark Johnson, 50, a U.K. citizen and U.K. and U.S. resident, and Stuart Scott, 43, a U.K. citizen and resident, were charged by complaint with conspiracy to commit wire fraud. Johnson was arrested last night at JFK International Airport in Queens, New York, and will be arraigned later today before U.S. Magistrate Judge Lois Bloom of the Eastern District of New York.
“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said Assistant Attorney General Caldwell. “This case demonstrates the Criminal Division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”
“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,” said U.S. Attorney Capers. “When questioned by their client about the higher price paid for their significant transaction, the defendants wove a web of lies designed to conceal the truth and divert attention away from their fraudulent trades. The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves.”
See the full charges here followed by the statement from a progressive group on the matter
Late last night, federal agents surprised and arrested HSBC’s global head of foreign exchange Mark Johnson as he prepared to fly out of New York’s John F. Kennedy airport. Johnson is being charged with wire fraud in connection to a $3.4 billion foreign exchange transaction in 2011.
Martin Caldwell, Campaigner at SumOfUs, an international corporate accountability organization, issued the following statement in response:
“No corporate executive or banker, no matter how wealthy or powerful, is above the law. We applaud the US Justice Department’s bold decision to arrest HSBC’s Mark Johnson for a front-running scheme involving a $3.4 billion currency transaction.
“Last year, five global banks pleaded guilty to charges related to rigging currency benchmarks, but HSBC is still being investigated for their actions. According to reports, HSBC has set aside nearly $1.3 billion for possible settlements related to these crimes.
“HSBC has been caught time and again breaking the law, whether laundering drug money, or helping clients evade paying their taxes, and it’s time they be brought to book for their actions. We urge the U.K. Financial Conduct Authority to follow the lead of the US Justice Department by reopening investigations into the matter and moving to hold HSBC accountable.”