(Bloomberg) -- Former HSBC Holdings Plc currency boss Mark Johnson, the first person convicted in a global crackdown on foreign-exchange rigging, was freed from U.S. custody and allowed to return home to the U.K. as he pursues an appeal.
Johnson, 52, was freed after posting $600,000 cash having served two months in a federal prison in Devens, Massachusetts. At his sentencing in April, the federal judge ordered the banker immediately imprisoned, saying he posed a flight risk.
A federal jury found Johnson, the bank’s former global head of foreign exchange, guilty last year of nine counts of wire fraud and conspiracy for front-running a $3.5 billion client order in December 2011. His lawyers are appealing the verdict, arguing that he didn’t know he was breaking American law.
The case was considered a victory for U.S. prosecutors after a global currency-rigging scandal resulted in the world’s largest banks paying more than $10 billion in penalties. In January, HSBC paid $100 million to resolve a U.S. Justice Department probe into the rigging of currency rates tied to the case.
Three former employees of JPMorgan Chase & Co., Barclays Plc, and Citigroup Inc. are awaiting trial on separate charges after being accused of using an online chat room they dubbed "the Cartel" to share information and fix currencies. They are scheduled to appear in federal court in Manhattan on Tuesday.
A federal appeals court in Manhattan granted Johnson a reprieve on June 19, saying he could be freed while he challenges his conviction. The panel left it up to U.S. District Judge Nicholas Garaufis in Brooklyn, New York to decide the terms of his release.
In seeking his return to the U.K., Johnson’s legal team also argued their client has medical issues, including an irregular heart beat and sports-related injuries to his left leg which made it necessary for him to return to the U.K. immediately where the country’s health service would cover treatment.
Garaufis seemed irked Monday that Johnson’s lawyers raised their client’s health problems before the appeals court but hadn’t asked him to adjourn the banker’s sentencing to allow him to see doctors at home in the U.K. before being sent to prison. He also noted that Johnson tore his ACL and injured a ligament playing rugby just days before his sentencing.
Frank Wohl, Johnson’s lawyer, said that, at the time, his client was "medically allowed" to play rugby.
HSBC was hired by Cairn Energy Plc to convert the proceeds of the sale of a subsidiary from dollars into pounds. Johnson and his colleagues promised to "drip feed" the transaction to avoid an unexpected rise in the currency rate. Cairn was defrauded because it paid a higher price for the U.K. currency after Johnson and his traders "ramped" up the pound, according to a government expert’s testimony.
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