Tag: Mark Johnson

Mark Johnson

And Another Thing…

I may, not for the first time, be reading too much into a brief sentence, but I found it significant in my conversation with Simon Potter, outgoing chair of the Global FX Committee, that when talking about the review of the Code he mentioned “the handling of larger orders” as one area of possible review. […]

Is the Johnson Appeal Raising the Stakes for the FX Market?

Written testimony has been lodged relating to former HSBC FX trading head Mark Johnson’s appeal against his conviction for wire fraud in the US and it contains a few surprises – some of which may indicate stronger implications for the FX industry than the original trial, as Colin Lambert discovers.The original trial of HSBC’s former global head of FX trading Mark Johnson was widely seen in the FX industry as being, aside from the outcome on his personal circumstances, a single issue case – what would the US legal system say about pre-hedging? The initial outcome – which is now being appealed – was a conviction and a jail sentence under the very broad umbrella of “wire fraud”, a decision that was seen as potentially having an impact on the FX Global Code, which explicitly (under certain circumstances), endorses the practice.

Is the Johnson Appeal Raising the Stakes for the FX Market?

Written testimony has been lodged relating to former HSBC FX trading head Mark Johnson’s appeal against his conviction for wire fraud in the US and it contains a few surprises – some of which may indicate stronger implications for the FX industry than the original trial, as Colin Lambert discovers.The original trial of HSBC’s former global head of FX trading Mark Johnson was widely seen in the FX industry as being, aside from the outcome on his personal circumstances, a single issue case – what would the US legal system say about pre-hedging? The initial outcome – which is now being appealed – was a conviction and a jail sentence under the very broad umbrella of “wire fraud”, a decision that was seen as potentially having an impact on the FX Global Code, which explicitly (under certain circumstances), endorses the practice.

And Another Thing…

The news this week that the US government has failed to prosecute another FX trader is yet another indication of both the eagerness of the authorities there to have a “head” to represent the general misconduct of bankers, as well as those same authorities’ lack of understanding as to how the FX market works. In this case, as well as that of Mark Johnson, there is more than enough evidence to indicate the “customer” knew perfectly well how the FX market operates and therefore were most definitely not “victims”.

In the FICC of It

There’s something for everyone in this week’s In the FICC of It podcast as Colin Lambert and Galen Stops traverse the US legal system, trading, crypto and China.
Listen in as Lambert explains why he is mystified at the prosecution’s flip-flop in the Mark Johnson case and angry at the FX industry’s previous lack of effort to explain how markets work to the US legal authorities; and Stops takes a look at a new report n his favourite industry – CTAs. Having had the data explained to him, Lambert also thinks he knows why some CTA sectors are doing well and some aren’t, so that’s another of his “theories” then…
Our podcasters then move onto debate whether crypto markets will evolve to an OTC model and whether this would be a good thing for attracting institutional money to what is still a relatively nascent market.
Stops closes out by reporting from an analysts’ briefing this week that highlighted a change in approach on the part of China to its programme of liberalisation of the yuan.

And Another Thing…

I have previously argued that the FX industry needs to pay attention to the outcome of the Mark Johnson trial. Reading through the appeal documents, however, indicates the stakes have been raised. The prosecution’s original case was, in my opinion, flawed when looking at how the FX market works, but the new charges take this to a new level and they throw into a harsher light the reluctance of certain trade associations to engage and educate the US authorities earlier in this case – we can only hope it is not too late.

Johnson Appeal Highlights “Ever-Shifting, Imprecise and Contradictory” Government Argument

The defence team conducting former HSBC FX trading head Mark Johnson’s appeal against his conviction in late 2017 have filed their appeal brief to the US Court of Appeal, in which they argue that the US Government’s brief offers, “…the latest flavour of the prosecution’s many ever-shifting, imprecise, and contradictory attempts to explain just what, exactly, the crime here was, and it exposes why there was none.” It highlights a series of new arguments put forward by the Government that were not heard by the jury, as well as a series of back tracks by the prosecution side.

And Finally…

With a reminder to readers that there is still time to vote for a real Irrational – P&L’s Socks of the Year (click here), let’s move onto to the next accolade, the “It’s been a tough year for…” award.
The winner might come as a surprise because I, along with many, feel the FX Global Code has made decent progress this past year and has also done a lot of good for the market by providing a clear framework within which people can work.

And Another Thing…

More than a few people have told me in recent weeks that they see the trial (which is now at the appeal stage) of Mark Johnson, and that of the Cartel threesome – which started this week in New York – as being inextricably linked. You all know what’s coming…I don’t agree. In fact I would argue there are some fundamental differences that mean this week’s trial – complex as it is – cannot be seen through the same lens.

And Finally…

I quite like reading academic papers on the FX market structure – often they state the obvious, but just as often they get the hamster back on the wheel in my head.
An interesting paper on spoofing and pinging in OTC FX markets was released recently, which does a great job of highlighting why platforms need to be on top of behaviour; how some LPs are nothing of the sort and how others’ behaviour could be confused with spoofing but shouldn’t be. The paper also provides support for my argument that Mark Johnson’s conviction should be over-turned.