By Jonathan Stempel
NEW YORK (Reuters) - A former top HSBC Holdings Plc <HSBA.L> executive threw his Scottish client "under the bus" by using his knowledge of its large planned currency transaction to do his own trading first, a U.S. prosecutor said on Monday at the start of a closely-watched trial.
But a lawyer for defendant Mark Johnson countered that the 28-year industry veteran with an "unblemished" record cheated no one, and that "everything he did was open."
Johnson, the former head of HSBC's global foreign exchange cash trading desk, is the first banker to be tried in the United States on currency rigging charges, following worldwide investigations into the roughly $5.1 trillion-a-day market.
The probes have led to about $10 billion in fines against several banks and the firing of dozens of traders. Johnson's trial in Brooklyn, New York, is expected to last four weeks.
Prosecutors said Edinburgh-based Cairn Energy Plc <CNE.L> hired Johnson and fellow HSBC executive Stuart Scott in 2011 to convert $3.5 billion into British pounds sterling as it prepared to sell an Indian subsidiary.
But prosecutors said Johnson and Scott first bought British pounds for HSBC's own accounts, driving up the price and reaping a roughly $8 million profit in a classic case of "front-running."
In her opening statement, Assistant U.S. Attorney Lauren Elbert said Johnson even knew Cairn had been falsely told a "Russian name" had been bidding sterling higher.
"When Johnson heard about the deal, all he saw were dollar signs," Elbert said. "He threw his client under the bus, to make more and more money."
Johnson's lawyer Frank Wohl said his client was looking out for Cairn's interests, not to wring "every last nickel" from the company.
He also said the alleged improper profit had not appeared out of line, likening it to an automobile dealer making $20 from selling a $10,000 car.
"In order to understand this case, you have to understand Mark Johnson's world," Wohl told jurors. "You can't just snip out a few words here and there, and ignore the rest."
Johnson, a British citizen, has pleaded not guilty to 10 wire fraud and conspiracy charges, following his July 2016 arrest at New York's John F. Kennedy International Airport.
Scott, HSBC's former head of cash trading for Europe, the Middle East and Africa, was arrested in June in Britain. U.S. authorities want him extradited.
At least four others have been criminally charged in connection with the U.S. currency probe. One pleaded guilty, and three pleaded not guilty.
The case is U.S. v. Johnson et al, U.S. District Court, Eastern District of New York, No. 16-cr-00457.
(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)