(NEW YORK) – Closing arguments in the U.S. trial of former HSBC Holdings Plc (HSBC-HOLDINGS-PLC) executive Mark Johnson came to an end Wednesday, with a lawyer for the government urging jurors to convict Johnson of defrauding a client.
Prosecutors have claimed Johnson, the former head of HSBC’s global foreign exchange cash trading desk, schemed with others at HSBC to ramp up the price of British pounds before executing a $3.5 billion currency trade for Edinburgh-based Cairn Energy Plc (CRNZF) in 2011, making millions at Cairn’s expense.
“The bottom line is they hacked up the price so they could take advantage of that confidential information they had,” Carol Sipperly, a lawyer for the government, told jurors on Wednesday.
Sipperly’s argument was a rebuttal to John Wing, a lawyer for Johnson, who spent much of Wednesday arguing that his client was innocent.
Wing said there was no way to do a massive currency transaction like the one HSBC did without affecting the price, but that Johnson and his colleagues had tried to get a fair price for Cairn and even given Cairn a rebate.
“Why are they giving money back to the client?” Wing asked. “What kind of fraudsters are these?”
The closing arguments had begun Tuesday, with government lawyer Brian Young summarizing the case prosecutors sought to build over more than three weeks of testimony.
Cairn hired HSBC in 2011 to convert $3.5 billion into British pounds sterling in connection with the sale of an Indian subsidiary, according to court filings.
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Young told jurors that Johnson and another HSBC executive who is also facing charges, Stuart Scott, devised a scheme to drive up the price of pounds by executing a series of trades before completing the trade for Cairn.
Young played jurors a phone call recorded after the deal in which Scott and Johnson told Cairn and its financial advisor that a “Russian buyer” had been responsible for a spike in the price of pounds.
That, Young said, was a lie.
Johnson is the first banker to be tried in the United States on currency rigging charges, following worldwide investigations into the roughly $5.1 trillion-a-day market.
The probes have led to about $10 billion in fines against several banks and the firing of dozens of traders.
Scott, HSBC’s former head of cash trading for Europe, the Middle East and Africa, was arrested in June in Britain. U.S. authorities want him extradited.