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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Cairn Energy    CNE   GB00B74CDH82

CAIRN ENERGY

(CNE)
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U.S. court upholds ex-HSBC executive's conviction for foreign-exchange scheme

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09/12/2019 | 02:15pm EDT

NEW YORK (Reuters) - A U.S. appeals court on Thursday upheld the conviction of a former HSBC Holdings Plc executive who was sentenced to two years in prison for defrauding Cairn Energy Plc in a $3.5 billion currency trade.

A unanimous three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan ruled that a jury had enough evidence to find that Mark Johnson, formerly head of HSBC’s global foreign exchange cash trading desk, withheld material information from Cairn.

"We are extremely disappointed with the result," said Alexandra Shapiro, Johnson's lawyer. "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."

A spokesman for the prosecutors declined to comment.

Johnson, a British citizen, was convicted of fraud in October 2017 in a federal court in the New York City borough of Brooklyn after a nearly four-week trial. He was the first banker to be tried in the United States as a result of worldwide investigations of the multitrillion-dollar per day currency market.

The probes have led to billions of dollars in fines against several banks and the firing of dozens of traders.

According to court filings, Cairn hired HSBC in 2011 to convert $3.5 billion into British pounds sterling in connection with the sale of an Indian subsidiary.

U.S. prosecutors said Johnson and another former HSBC executive, Stuart Scott, devised a scheme to drive up the price of pounds by executing a series of trades before carrying out the trade for Cairn.

Such trading in advance of a client's order to make a profit is known as "front-running."

On appeal, Johnson argued that front-running is not illegal and that the deal was beneficial to Cairn.

"But Johnson was not convicted of frontrunning," the appeals court wrote Thursday. "He was convicted of making material misrepresentations to Cairn about how HSBC would trade ahead of the fix and the price would be determined."

Evidence that Johnson had misled Cairn was enough to support the conviction, the court found.

U.S. prosecutors also charged Scott, but Britain's Supreme Court last year blocked his extradition to the United States. Johnson had chosen not to fight extradition.

(Reporting by Brendan Pierson in New York; Editing by Matthew Lewis and Steve Orlofsky)

By Brendan Pierson

Stocks mentioned in the article
ChangeLast1st jan.
CAIRN ENERGY 7.71% 206.8 Delayed Quote.37.87%
HSBC HOLDINGS PLC -1.57% 620.8 Delayed Quote.-4.37%
NOW INC 3.91% 12.75 Delayed Quote.9.54%
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Financials (USD)
Sales 2019 502 M
EBIT 2019 93,0 M
Net income 2019 94,6 M
Debt 2019 40,9 M
Yield 2019 -
P/E ratio 2019 21,6x
P/E ratio 2020 31,4x
EV / Sales2019 3,05x
EV / Sales2020 3,46x
Capitalization 1 492 M
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Mean consensus BUY
Number of Analysts 21
Average target price 2,90  $
Last Close Price 2,57  $
Spread / Highest target 45,4%
Spread / Average Target 12,8%
Spread / Lowest Target -14,2%
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Simon John Thomson Chief Executive Officer & Executive Director
Ian Paul Tyler Non-Executive Chairman
James Smith Chief Financial Officer & Executive Director
Alexander Ferdinand Berger Independent Non-Executive Director
Keith Geddes Lough Independent Non-Executive Director
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