LONDON (Reuters) – Former senior HSBC currency trader Stuart Scott will be extradited to the United States to face charges that he defrauded Cairn Energy Plc (L:CNE) in a $3.5 billion currency trade in 2011, a London court ruled on Thursday.
On Monday Scott’s former boss Mark Johnson was convicted of fraud in the United States in the same case.
“We believe the U.S. government’s case to be flawed and materially inaccurate and we also believe that this has led the court to fall into error,” a lawyer representing Scott said.
“This case is unique in that it is a UK-centric case and represents a far too aggressive an assertion of the U.S. jurisdiction to criminalize conduct,” she said in a statement, adding that Scott would contest the extradition ruling.
The pair were charged by the U.S. Department of Justice last year of ‘front running’ the Cairn trade, meaning they were alleged to have profited at their client’s expense by trading before they executed Cairn’s currency order.
Johnson was head of HSBC’s global foreign exchange cash trading desk at the time, while Scott was HSBC’s head of cash trading for Europe, the Middle East and Africa.
Johnson, a 51-year-old British citizen, was the first banker to be tried in the United States as a result of worldwide investigations into the multi-trillion-dollar per day currency market.
The probes have led to about $10 billion in fines against several banks and the firing of dozens of traders.