Ex-HSBC currency chief's motives debated as U.S. fraud trial starts

Source: reuters

NEW YORK (Reuters) - A former top HSBC Holdings Plc (HSBA.L) executive threw his Scottish client “under the bus” by using his knowledge of its large planned currency transaction to do his own trading first, a U.S. prosecutor said on Monday at the start of a closely-watched trial.

The probes have led to about $10 billion in fines against several banks and the firing of dozens of traders. Johnson’s trial in Brooklyn, New York, is expected to last four weeks.

Prosecutors said Edinburgh-based Cairn Energy Plc (CNE.L) hired Johnson and fellow HSBC executive Stuart Scott in 2011 to convert $3.5 billion into British pounds sterling as it prepared to sell an Indian subsidiary.

But prosecutors said Johnson and Scott first bought British pounds for HSBC’s own accounts, driving up the price and reaping a roughly $8 million profit in a classic case of “front-running.”

Read more: http://www.reuters.com/article/us-hsbc-usa-crime/ex-hsbc-currency-chiefs-motives-debated-as-u-s-fraud-trial-starts-idUSKCN1C02J7?il=0