Cairn Energy Said to Be Victim of HSBC Currency Frontrunning
- Follows arrest in New York of senior HSBC trader Mark Johnson
- ‘Ohhhh, f***ing Christmas, Johnson says in Dec. 2011 call
Cairn Energy's exploration plant at Barmer in Rajasthan.
Photographer: Money Sharma/AFP via Getty ImagesThe unidentified victim at the center of the arrest of HSBC Holdings Plc executive Mark Johnson was Cairn Energy Plc, when the British oil explorer sold its Indian unit to Vedanta Resources Plc in 2011, according to people familiar with the transaction.
HSBC was commissioned to convert $3.5 billion of the sale proceeds into British pounds, according to court documents unsealed in New York. Johnson, HSBC’s global head of foreign exchange cash trading in London, and colleague Stuart Scott, the former head of currency trading in Europe, used knowledge of the trade to front-run the order, making $8 million for the firm, the filings say. They profited by buying pounds and instructing colleagues to do the same, knowing that the exchange rate would spike after the transaction was processed.