Washington (AFP) – The former global head of cash currency trading at the British banking giant HSBC was sentenced Thursday to two years in prison for defrauding a client out of millions of dollars, the Justice Department said.
British national Mark Johnson, 51, also will pay a $300,000 fine following his October conviction on nine wire fraud and conspiracy charges.
The foreign exchange trader “cheated his client out of millions and now he’s going to prison for it,” Justice Department officials John Cronan said in a statement.
Prosecutors accused Johnson of a scam called “front-running,” in which he used confidential information from a client in late 2011 to purchase British pounds for HSBC, ramping up the price before executing a $3.5 billion transaction for the client.
Johnson and traders acting at his direction generated $7.3 million in profits for HSBC at the expense of the unidentified client, the Justice Department said.
The sentencing follows HSBC’s $1.6 million settlement in January with US derivatives market regulators over “spoofing” precious metals futures markets, a scheme in which traders placed and then aborted trades to drive up prices.