Federal agents surprised an HSBC Holdings Plc executive as he prepared to fly out of New York’s Kennedy airport around 7:30 p.m. Tuesday, arresting him for an alleged front-running scheme involving a $3.5 billion currency transaction in 2011.
Mark Johnson, the bank's global head of foreign-exchange cash trading, was arrested Tuesday at JFK International Airport, according to multiple reports. He faces charges following a three-year investigation into currency trading practices at multiple global banks, according to the reports.
In addition, Stuart Scott, former head of cash trading for Europe, the Middle East and Africa, also faces wire fraud conspiracy charges, though he has not been arrested yet. Johnson and Scott committed the alleged violation on a $3.5 million trade, which allegedly occurred in October 2011 involved an unnamed oil and gas company that wanted to exchange U.S. dollars with British pounds. Authorities said HSBC made $8 million from the transaction.
The Department of Justice charged that "Johnson and Scott caused the $3.5 billion foreign exchange transaction to be executed in a manner that was designed to spike the price of the pound sterling, to the benefit of HSBC and at the expense of their client."