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Speaker 1: A jury in Brooklyn is weighing the case against former

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Speaker 1: HSBC currency trader Mark Johnson, who's accused of trading ahead

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Speaker 1: of a customer's three point five billion dollar foreign exchange order,

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Speaker 1: forcing the client to pay a higher price. HSBC earned

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Speaker 1: eight million dollars on the deal. The prosecution strongest evidence

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Speaker 1: is recordings of phone calls between Johnson and traders, like

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Speaker 1: this one discussing the aftermath of the order. Yeah, I

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Speaker 1: think we got away with it. Yeah, I think that cool.

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Speaker 1: Then we're gonna say, well, unless be honest and tell

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Speaker 1: us what you like, complete idiot. Johnson took the stand

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Speaker 1: in his own defense and insisted that he acted properly.

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Speaker 1: Joining us are Patricia Hurtado, Bloomberg News Federal court reporter,

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Speaker 1: and Lennan When Bloomberg News FX reporter pat When the

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Speaker 1: defendant takes the stand and his credibility, credibility sometimes outweighs

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Speaker 1: other things in the jury's mind. How did Johnson do

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Speaker 1: in thirteen hours on the stand? Well, actually he was

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Speaker 1: on longer than thirteen hours, over three days, so probably

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Speaker 1: about fifteen and um he told a story that is

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Speaker 1: to refute what the jury heard on these calls and

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Speaker 1: the saying everything is above board, he handled it properly,

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Speaker 1: the client did got a fair price for the transaction,

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Speaker 1: and that that basically there was no funny business here.

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Speaker 1: How bad are those tapes? Um, if you were, if

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Speaker 1: you were, you know, just look listening as a lay person,

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Speaker 1: the jury is, um listening to someone who is celebrating

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Speaker 1: the trades, who's saying that client is going to squeal,

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Speaker 1: who's saying effing Christmas? So um, you know, they do

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Speaker 1: sound pretty inflammatory and and pretty uh, you know, negative

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Speaker 1: for for the defense or for the defendants. So it's

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Speaker 1: a pretty stark contrast to what the jury was able

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Speaker 1: to see on the stand, which is, you know, a

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Speaker 1: calm composed trader as opposed to this sort of gun

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Speaker 1: slinging guy that's on the phone. Pat was he able

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Speaker 1: to explain away any of those incriminating calls on the stand, Well,

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Speaker 1: his lawyer, I mean, the the ninety percent of his

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Speaker 1: direct of his of his testimony was brought out by

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Speaker 1: his lawyer in these long involved explanations of how a

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Speaker 1: foreign of a full risk transfer trade would have happened

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Speaker 1: as opposed to what they did was, which was a

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Speaker 1: fixed trade and they were going to take the price

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Speaker 1: at three pm on December seven. UM, there would be long, long,

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Speaker 1: long answers, and UM one I thought I would want

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Speaker 1: to hear the answer because I want to understand what

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Speaker 1: the transaction, how it happened. And it ended up being

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Speaker 1: very confusing. So I'm not sure what the defense was

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Speaker 1: going for, but I guess they felt fullsome was better

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Speaker 1: than being succinct because and so UM the prosecutor on

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Speaker 1: cross examination try to bring out inconsistencies between what he

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Speaker 1: said in the call and as opposed to what he

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Speaker 1: said in email chats versus what he actually was explaining

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Speaker 1: on the stand. For example, there's a chat um where

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Speaker 1: an ib chat a Bloomberg chat where he says my

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Speaker 1: watch is off and he claims that that's not which

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Speaker 1: triggered eleven other traders at the bank to start trading

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Speaker 1: ahead of the transaction. He said that the the client

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Speaker 1: was unnoticed that early trading would happen, just to amass

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Speaker 1: such a large transaction, and to do that, to do

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Speaker 1: it as well as it was code for that uh

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Speaker 1: to basically not alert outside the bank so news of

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Speaker 1: the transaction wouldn't leak out. And then they're the client

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Speaker 1: wouldn't be hurt. And the defense also put on some tapes,

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Speaker 1: but those haven't been released by the defense attorneys. What

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Speaker 1: were they trying to show with the recordings that they

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Speaker 1: put on. I think the defense was trying to show

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Speaker 1: again that these were standard business practices, that there wasn't

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Speaker 1: anything nefarious going on, that the bankers were trying to

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Speaker 1: prepare for a very very large order and they were

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Speaker 1: kind of just carrying out business as usual. So unfortunately,

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Speaker 1: we you know, weren't able to get that side. But

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Speaker 1: we've got, you know, what the prosecution is proposing as

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Speaker 1: a very damning evidence proving to the contrary that Johnson

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Speaker 1: and Stuart Scott had malicious intent, that they were trying

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Speaker 1: to hide information from their clients, and um, you know,

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Speaker 1: trying to trade in order to profit from their their

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Speaker 1: client's information. Pat I read that he said that the

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Speaker 1: client was aware that there would be early trades. Was

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Speaker 1: there proof of that, Well, it has to do with

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Speaker 1: the fact that originally how the trade was pitched. They

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Speaker 1: pitched it as an eleven o'clock I mean, basically, the

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Speaker 1: bank went in and promised to drip the the transaction.

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Speaker 1: The defense of Johnson's lawyers are saying, well that sales

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Speaker 1: guys just promising the moon and the stars. But this

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Speaker 1: was supposed to be you know Johnson. The jury just

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Speaker 1: right now heard a replay of Johnson talking to uh

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Speaker 1: uh the advisor for Karen the client and UM in October,

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Speaker 1: before they'd even gotten a deal, and saying that it

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Speaker 1: could happen. It could take two hours, that they would

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Speaker 1: slowly accumulate a position. UM, so it's sort of a

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Speaker 1: little difficult to tell whether or not how much does

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Speaker 1: the client know or were they kind of misled into

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Speaker 1: doing a transaction not at eleven o'clock six but at

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Speaker 1: three pm when there was left liquidity and it caused

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Speaker 1: it was easier to manipulate, which is what the government claims.

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Speaker 1: So um, it's sort of a moving target of what

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Speaker 1: exactly the client understood. But they actually on the day

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Speaker 1: of the transaction go and ask Johnson and his co

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Speaker 1: defendant what should we do? Do you want to do

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Speaker 1: a three o'clock fix or four o'clock fix? Would you

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Speaker 1: guys recommend? And then they said we think three would

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Speaker 1: be better. But it only gave HSBC a half an

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Speaker 1: hour to do the transaction. They aimed that thirty minute

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Speaker 1: time period compressed the purchasing causing the disruption and the

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Speaker 1: market volatility that caused the price Dispike Lennon, there were

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Speaker 1: the prosecution put on some expert testimony about how the

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Speaker 1: trading happened at HSBC that day. What did they show, Well,

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Speaker 1: the boat sides showed the price charts and the trading

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Speaker 1: activity by the HSBC traders. And so what you see is,

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Speaker 1: you know, the price kind of taking along then gradually

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Speaker 1: coming up, and at the end of this period, you know,

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Speaker 1: around three o'clock the price really shooting upwards um. And

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Speaker 1: so obviously the prosecution side makes the argument that this

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Speaker 1: is all of the HSBC traders getting up, you know,

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Speaker 1: aggressively buying pounds and really artificially inflating the price that

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Speaker 1: their client would eventually have to pay um. The defense

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Speaker 1: argues that, hey, look, this is a huge order, several

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Speaker 1: billion dollars. It's going to move the market regardless of

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Speaker 1: how you you know, no matter how you slice it.

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Speaker 1: So their actions to try and prepare for that trade,

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Speaker 1: they say, are just an evidence of normal hedging in

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Speaker 1: the market. Pat been about thirty seconds juries Love Fridays

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Speaker 1: to come out with verdicts but how long have they

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Speaker 1: been deliberating. Um, they started deliberating around I would say

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Speaker 1: eleven twenty yesterday, so it was about five hours yesterday

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Speaker 1: and they started at about nine fifteen today. But anyway,

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Speaker 1: they've been asking for tons of evidence and testimony, so

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Speaker 1: it might be climbed a long afternoon. It's unclear if

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Speaker 1: they might reach the goal line at at five o'clock tonight,

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Speaker 1: So good luck waiting. I know what that's like. Thanks

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Speaker 1: so much both of you for being on Bloomberg Law.

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Speaker 1: That's Patricia heard Tato, she's a Bloomberg News Federal Court reporter,

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Speaker 1: and Lennon when Bloomberg News FX reporter. That's it for

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Speaker 1: the edition of Bloomberg Law. We'll see you on Monday.

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Speaker 1: Thanks to our producer Chris try Comy, our technical director

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Speaker 1: Tris try Comby, and our producer day of It Suckerman.

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Speaker 1: Have a great weekend and you can always find the

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Speaker 1: latest legal news at Bloomberg Law dot com. Coming up

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Speaker 1: next to Bloomberg Markets with Carol Messer h