A big bank executive was arrested on the JFK airport in Queens this week.
The head of global foreign exchange (FX) cash trading at HSBC Mark Johnson, 50, who is a citizen of Great Britain, was arrested at JFK International Airport on Tuesday, July 19, for conspiring to defraud a client. Along with him, another Great Britain citizen, Stuart Scott, 43, HSBC’s former head of FX cash trading for Europe, the Middle East, and Africa, was also arrested.
The scheme, known as “front running,” began in November 2011. Johnson and Scott used information provided to them by a client about a foreign exchange transaction of about $3.5 billion to purchase Pound Sterling for HSBC’s “proprietary” accounts, which they held until the client’s planned transaction was executed.
The complaint suggests that Johnson and Scott lied about the planned transactions in order to hide their selfish motives behind their actions. Through this scheme, the two men generated about $8 million in profit.
“Our collective efforts help ensure public confidence in the financial markets. It is critically important to hold individuals accountable for their actions, particularly those who abuse their positions of public trust. We will continue to pursue justice for those involved as this case moves forward,” Acting Inspector General Gibson from the Federal Deposit Insurance Corporation (FDIC) said.
The investigation is being conducted by the FDIC’s Office of Inspector General and the FBI’s Washington Field Office. Since 2009, the justice department has filed more than 18,000 financial fraud causes. For more information on the task force, visit the website Stop Fraud.