Millionaire Burley trader to fight on despite losing £3.5bn fraud appeal

A BURLEY trader has lost his appeal against a conviction for fraud relating to a £3.5bn energy deal in the US.

Mark Johnson, a former HSBC foreign currency executive, was given a two-year jail sentence and $300,000 fine last year after a jury convicted him of nine counts of fraud and one of conspiracy following a high-profile trial in New York.

It emanated from a transaction in 2011 in which Johnson was found to have manipulated currency values for the benefit of himself and about $8m for the bank. It was the first case to stem from the alleged foreign exchange (forex) rigging scandal. Edinburgh-based Cairn Energy had asked HSBC to convert proceeds from the sale of an Indian subsidiary from dollars into pounds.

Johnson challenged that conviction, his lawyers arguing his conduct was not criminal and attacking the US Department of Justice’s (DoJ) case as “ever shifting”.

However, judges at the US Court of Appeals for the Second Circuit have now ruled there was “sufficient evidence” to lead a jury to conclude Johnson deprived Cairn of the ability to make proper economic decisions and that he had made material misrepresentations to the company.

“We conclude that Johnson’s misrepresentations provided sufficient evidence for a reasonable jury to find beyond reasonable doubt that he intended to defraud Cairn,” the judgement read.

Johnson (pictured) went to prison after the guilty verdicts but was released weeks into his sentence when he appealed.

It is not clear following the latest ruling if Johnson will have to return to the US immediately to serve the remainder of his jail term.

Speaking after the ruling, his attorney, Alexandra Shapiro, said Johnson was innocent and would continue to explore options available to him, although she could not publicly elaborate further.

“We are extremely disappointed with the result,” she told the A&T. “Mark Johnson is innocent. We intend to keep fighting to ensure that justice prevails and will explore every legal avenue possible to clear his name.”

As reported in the A&T, the original trial hinged in part on whether Mr Johnson and the bank owed a so-called fiduciary responsibility to the oil company compelling them to find the cheapest possible rate for a large transaction to be completed at the rate of a 3pm benchmark.

When the trade was executed it netted the bank an £8m profit – or just 0.2% of the original deal. A secret recording caught Mr Johnson saying “f***ing Christmas” when told that figure.

But after the conviction financial experts raised questions over the case and claimed that, should the guilty verdicts stand, there would be huge implications for foreign exchange traders.

Co-defendant Stuart Scott, who denied any wrongdoing, successfully challenged an extradition order and had the case against him dropped. More recently a series of other UK traders accused of wrongdoing went on trial in the US and were acquitted.

Mr Johnson’s appeal bid failed despite leading global financial group the ACI Financial Markets Association and a Northwestern University professor submitting special legal documents in support.

During his banking career Mr Johnson worked in London and New York while living in Burley with his children and wife, Diane.

He played several seasons with Ellingham and Ringwood Rugby Club, making appearances for the first XV and on occasion captaining the third team.