Published by Global Banking & Finance Review®
Posted on July 18, 2025
3 min readLast updated: January 22, 2026
Add as preferred source on GoogleA US appeals court overturned HSBC executive Mark Johnson's fraud conviction, citing a Supreme Court ruling that affected the case's basis.
By Jonathan Stempel
NEW YORK (Reuters) -A U.S. appeals court on Thursday voided the 2017 fraud conviction of a former HSBC executive who spent two years in prison for "front-running" a British oil and gas exploration company's $3.5 billion currency trade.
In a 3-0 decision, the 2nd U.S. Circuit Court of Appeals in Manhattan said Mark Johnson's conviction was tainted because the Supreme Court in an unrelated case later repudiated a fraud theory that underlay it.
The appeals court also expressed "grave doubt" Johnson could have been convicted under an alternative theory that he defrauded HSBC client Cairn Energy, now known as Capricorn Energy.
A spokesman for the U.S. attorney's office in Brooklyn declined to comment.
"We are delighted that justice has finally been achieved for Mark Johnson," his lawyer Alexandra Shapiro said in a statement. "Mr. Johnson carried out the Cairn transaction consistent with industry practice and in violation of no law or rule."
Johnson, a British father of six in his late 50s, had been the head of HSBC's global foreign exchange cash trading desk.
He was the first banker tried in the United States on currency rigging charges, following global probes into the multitrillion-dollar per day currency market.
According to prosecutors, Cairn had retained Johnson and another former HSBC executive in 2011 to convert $3.5 billion into British pounds sterling as it prepared to sell an Indian subsidiary.
Prosecutors said the executives quietly bought pounds for HSBC's own accounts before completing Edinburgh-based Cairn's trade, reaping a profit of about $7 million, court papers show.
A jury convicted Johnson of wire fraud and conspiracy after a four-week trial. The appeals court upheld the conviction in 2019.
But on Thursday, the appeals court said a 2023 Supreme Court ruling, Ciminelli v U.S., meant Johnson could not be convicted of denying Cairn a right to control its assets by reneging on a promise not to ramp up the pound's price.
Circuit Judge Guido Calabresi also said evidence that Johnson breached duties to Cairn by misappropriating its confidential information for his own benefit was "weak," and it was unlikely a jury would convict Johnson on that basis alone.
"We find ourselves--at the very least--in 'virtual equipoise' as to whether any jury, presented only with the misappropriation theory, would convict Johnson," Calabresi wrote. "That is more than enough to leave us with grave doubt."
The appeals court returned the case to U.S. District Judge Nicholas Garaufis, who oversaw the trial.
The case is Johnson v. U.S., 2nd U.S. Circuit Court of Appeals, No. 24-1221.
(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler)
Mark Johnson was convicted of wire fraud and conspiracy for 'front-running' a trade involving Cairn Energy, where he and another HSBC executive profited by buying pounds before completing Cairn's trade.
The 2nd U.S. Circuit Court of Appeals voided Johnson's conviction, stating it was tainted by a later Supreme Court ruling that repudiated the fraud theory used in his case.
The appeals court referenced the 2023 Supreme Court ruling in Ciminelli v U.S., which affected the legal basis for Johnson's conviction.
Judge Calabresi noted that the evidence suggesting Johnson breached his duties to Cairn by misappropriating confidential information was 'weak,' raising doubts about a jury's likelihood of convicting him.
The appeals court returned the case to U.S. District Judge Nicholas Garaufis, who oversaw the original trial, for further proceedings.
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