A British trader who was jailed in the United States for allegedly manipulating foreign exchange rates has had his conviction overturned after a nine-year struggle for justice.
Former HSBC trader Mark Johnson, 59, has fought to establish his innocence ever since he was convicted of fraud in 2017 in connection with a large foreign exchange trade six years earlier.
He served time in jail in US federal prisons and in Wandsworth prison in the UK, exhausting avenues of appeal before being released on license in 2022.
After the US courts in 2023 overturned a law that was used to prosecute him, he launched a fresh appeal, which has now been allowed by a US appeal court, granting him a full acquittal.
Mr Johnson’s US lawyer Alexandra Shapiro said: “We are delighted that justice has finally been achieved for Mark Johnson, after a nine-year ordeal. This is a case that never should have been brought.”
Prosecutors at Mr Johnson’s trial alleged he had conspired with a colleague to increase the price of sterling against the dollar before executing a huge foreign exchange trade for HSBC’s client Cairn Energy, converting $3.5bn into pounds.
They alleged that on behalf of HSBC, Mr Johnson arranged to buy sterling in advance, inflating the currency’s value so that the bank made a quick gain before executing the trade for its client at a higher price – so called ‘front-running’.
Following his conviction a foreign exchange industry body, ACI Financial Markets Association, petitioned the court, protesting that purchasing a currency ahead of a large trade was a normal industry practice to manage a bank’s risk, known in the industry as ‘pre-hedging’.
“Mr Johnson carried out the Cairn transaction consistent with industry practice and in violation of no law or rule, and he looks forward to moving on with his life,” said Ms Shapiro.
Mr Johnson, a father of five from Hampshire, was originally arrested on 19 July 2016 as he accompanied his son and a friend to JFK Airport on his way home to the UK and was later tried and convicted on 18 October 2017.
His arrest took place three days after demands in Congress for the US government to pursue the prosecution of HSBC employees who had avoided facing justice.
Those calls were prompted by a congressional report, Too Big to Jail, which revealed that the British government had secretly intervened on HSBC’s behalf in 2012, when the bank face the risk of prosecution for helping a Mexican drug cartel launder £881m and for facilitating trades with US-sanctioned countries such as Iran, Libya and Sudan.
Senior executives at HSBC had urged him to accept a new role in the US in March 2016, four months before his subsequent arrest. Because he was arrested in the US, it meant that there was no need for extradition proceedings.
By contrast his alleged co-conspirator, Stuart Scott, contested extradition to the US and won his hearing. The US Department of Justice later withdrew the charges against him.