Ex-HSBC Trader Will Have to Put Up More Money to Get Out of Jail

(Bloomberg) -- Former HSBC Holdings Plc currency boss Mark Johnson won’t be walking out of prison until he puts up more money to ensure his return to the U.S.

U.S. District Judge Nicholas Garaufis said Monday he’d consider allowing Johnson to return to the U.K. while he awaits the results of an appeal of his conviction for front-running a $3.5 billion client order in 2011. The judge said he’d like to see the banker double the cash he’s put up to secure his bail to a total of $600,000.

While Johnson, the first person to be convicted in a global crackdown on currency rigging, may be ready to leave for the U.K. soon, lawyers for three former British currency traders are scheduled to appear Tuesday in Manhattan federal court to plan for their Oct. 1 trial.

Former JPMorgan Chase & Co. trader Richard Usher, ex-Barclays Plc trader Chris Ashton and former Citigroup Inc. trader Rohan Ramchandani are charged with conspiring to fix the foreign-exchange market. They came under the eye of U.S. prosecutors for their communications in an electronic chat room known as “the Cartel.”

The U.S. claims they discussed customer names, orders and trades and risk positions to fix bids and maximize their profits. Each is charged with a single count of conspiracy to restrain trade in violation of antitrust law.

U.S. District Judge Richard Berman last month rejected their request to have the charges dismissed. He said it’s fair to prosecute the three men in New York because the charges involve suppression of competition in Euro-U.S. Dollar trading in the U.S.

Johnson, 52, appeared for a bail hearing Monday in federal court in Brooklyn, New York. It was the first time the U.K. trader has been seen in public since he was sentenced in April to serve two years in prison for currency rigging. Wearing beige prison fatigues, bright orange sneakers and white tube socks, it was a far cry from his typical banker’s navy pinstripes.

Garaufis had ordered him imprisoned immediately after he was convicted, saying he posed a flight risk. But a federal appeals court granted Johnson a reprieve on June 19 ordering his release while he appeals the conviction. The panel left it up to Garaufis to determine the conditions of his release.

Garaufis seemed irked Monday that Johnson’s lawyers had raised their client’s health problems before the appeals court and hadn’t asked him to adjourn the banker’s sentencing to allow him to get treatment before being sent to prison.

Johnson’s lawyers had argued he needs to urgently return home to undergo a medical procedure to treat an irregular heart beat and have surgery to repair his knee, which he injured while playing rugby. If he’s in the U.K., he’d be covered by the country’s health service, while he’d have to pay in the U.S.

"When he was over there, he was out there playing rugby, he wasn’t worried about his health or his heart?" Garaufis asked. "Why should I be more concerned than he is?”

Johnson’s lawyer Frank Wohl said that, at the time, his client was "medically allowed" to play rugby.

U.S. prosecutors objected to letting Johnson leave the country.

Prosecutor Lauren Elbert said the U.S. was willing to release $300,000 in cash Johnson put up for bail to pay for living expenses and medical treatment while he appeals.

Garaufis agreed to adjourn the bail hearing until Tuesday morning and said Johnson must decide by then whether he’s willing to put up the additional $300,000. The judge said Johnson appears to be able to afford the additional money since he has "hundreds of thousands of dollars" invested in stocks and securities.

The case is U.S. v. Johnson, 16-cr-457, U.S. District Court, Eastern District of New York (Brooklyn).

©2018 Bloomberg L.P.