After nearly a decade of legal battles, former HSBC foreign exchange chief Mark Johnson has finally had his 2017 fraud conviction overturned by a U.S. appeals court. Johnson, who was once jailed for allegedly manipulating currency rates during a massive $3.5 billion trade, can now move forward with a full acquittal, marking the end of a long and arduous fight for justice.
Johnson, 59, a British citizen and father of six from Hampshire, was convicted in 2017 for "front-running" a currency trade involving Cairn Energy, a British oil and gas exploration company. Prosecutors accused him of conspiring with a colleague to artificially inflate the value of the British pound against the U.S. dollar before executing Cairn's massive currency exchange, thereby securing a quick profit for HSBC, the bank he worked for. The trade took place in 2011, but Johnson's arrest came five years later, on July 19, 2016, at JFK Airport in New York as he was returning to the UK.
The conviction was based on a legal theory known as the "right-to-control" theory of fraud, which suggested Johnson had denied Cairn Energy control over its assets by manipulating the currency price. However, this theory was later repudiated by the U.S. Supreme Court in an unrelated 2023 case, Ciminelli v. U.S., which became a pivotal factor in Johnson's appeal.
On July 17, 2025, the 2nd U.S. Circuit Court of Appeals in Manhattan unanimously ruled to void Johnson's conviction. The court found that the legal basis for his conviction had been invalidated, and expressed "grave doubt" that Johnson could have been convicted under alternative fraud theories related to misappropriating confidential information from Cairn Energy. Circuit Judge Guido Calabresi noted that the evidence suggesting Johnson breached his duties to Cairn for personal gain was "weak," and it was unlikely any jury would convict him on that basis alone.
Johnson's lawyer, Alexandra Shapiro, welcomed the decision, stating, "We are delighted that justice has finally been achieved for Mark Johnson, after a nine-year ordeal. This is a case that never should have been brought." She emphasized that Johnson had executed the Cairn transaction "consistent with industry practice and in violation of no law or rule." Indeed, the foreign exchange industry's ACI Financial Markets Association had previously protested Johnson's conviction, arguing that buying currency ahead of a large trade—known as "pre-hedging"—is a standard risk management practice in banking, not illegal "front-running."
Johnson's conviction was the first in a global crackdown on foreign exchange rigging, a multitrillion-dollar market where allegations of manipulation have drawn intense regulatory scrutiny worldwide. The case against him was part of a broader effort to hold traders and banks accountable for unethical currency market practices. Yet, Johnson's conviction was initially upheld by the appeals court in 2019, prolonging his incarceration and legal challenges.
He served time in U.S. federal prisons and Wandsworth prison in the UK, ultimately being released on license in 2022. His arrest in 2016 came amid congressional demands for prosecutions of HSBC employees who had previously evaded justice. These demands followed revelations in a 2012 congressional report titled "Too Big to Jail," which exposed how the British government had secretly intervened to protect HSBC from prosecution over laundering $881 million for a Mexican drug cartel and facilitating trades with sanctioned countries such as Iran, Libya, and Sudan.
Interestingly, Johnson was urged by senior HSBC executives in March 2016 to accept a new role in the United States, just four months before his arrest. This move meant that extradition proceedings were unnecessary, unlike his alleged co-conspirator, Stuart Scott, who contested extradition to the U.S. and ultimately had charges withdrawn by the Department of Justice.
The prosecution had alleged that Johnson and his colleague quietly bought pounds for HSBC's own accounts before executing Cairn's trade, earning the bank an estimated $7 million profit. However, the appeals court's recent ruling underscores that these actions were more consistent with accepted industry practices than criminal fraud.
Following the court's decision, the case was sent back to U.S. District Judge Nicholas Garaufis, who originally oversaw the trial, for further proceedings consistent with the appeals ruling. The legal saga, known formally as Johnson v. U.S., 2nd U.S. Circuit Court of Appeals, No. 24-1221, represents a landmark moment in the ongoing debate over financial market regulation and the boundaries of lawful trading conduct.
Mark Johnson's story encapsulates the complexities of prosecuting financial crimes in an industry where sophisticated trading strategies often blur the lines between aggressive risk management and unlawful manipulation. While his conviction has been overturned, the case has sparked broader discussions about transparency, accountability, and fairness in global currency markets.
After nearly ten years of legal wrangling, Johnson can finally put this chapter behind him and focus on rebuilding his life. "He looks forward to moving on with his life," his lawyer confirmed, a sentiment likely shared by many who have watched this high-profile case unfold.
