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United States v. Johnson

United States Court of Appeals for the Second Circuit

May 31, 2019, Argued; September 12, 2019, Decided

Docket No. 18-1503-cr

Opinion

 [*84]  LOHIER, Circuit Judge:

Mark Johnson, the former global head of the foreign exchange trading desk at the investment bank HSBC, was convicted by a jury of wire fraud and conspiracy to commit wire fraud in connection with a foreign currency exchange transaction with Cairn Energy. At trial and on appeal, the Government argued that Johnson could be convicted on either of two theories of criminal liability: (1) misappropriation of the confidential information of Cairn in breach of a duty of trust and confidence owed to Cairn; or (2) denial of Cairn's right to control its assets by depriving it of information necessary to make discretionary economic decisions. In response, Johnson argues that there was insufficient evidence [**3]  for a jury to convict him under the misappropriation theory and also insufficient evidence to convict him under a right-to-control theory because Cairn received the benefit of its bargain and any misrepresentations that Johnson may have made were immaterial. We conclude that there was sufficient evidence to convict Johnson on the right-to-control theory because a reasonable jury could conclude that his misrepresentations to Cairn related to the price of the transaction, which was an essential element of the parties' bargain, and were capable of  [*85]  influencing Cairn's decisionmaking. Accordingly, we need not reach Johnson's arguments as to the misappropriation theory, and Johnson's conviction is AFFIRMED.

Background

1. Facts

Because this is an appeal from a judgment of conviction entered after a jury trial and Johnson challenges the sufficiency of the evidence against him, the following facts are drawn from the trial evidence and described "in the light most favorable to the Government." United States v. Caltabiano, 871 F.3d 210, 213 (2d Cir. 2017).

A. Cairn Energy Selects HSBC to Perform a Large FX Transaction

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939 F.3d 82 *; 2019 U.S. App. LEXIS 27478 **; 2019 WL 4308625

UNITED STATES OF AMERICA, Appellee, v. MARK JOHNSON, Defendant-Appellant.1

Subsequent History: Corrected by, Decision reached on appeal by, Motion granted by United States v. Johnson, 945 F.3d 606, 2019 U.S. App. LEXIS 37049 (2d Cir., Sept. 12, 2019)

Prior History:  [**1] Mark Johnson, the former global head of the foreign exchange trading desk at the investment bank HSBC, was convicted by a jury of wire fraud and conspiracy to commit wire fraud in connection with a foreign currency exchange transaction with Cairn Energy. At trial, the Government argued, among other things, that Johnson denied Cairn the right to control its assets by depriving it of information necessary to make its own discretionary economic decisions Johnson argues that there was insufficient evidence for a reasonable jury to convict him under a right-to-control theory because Cairn received the benefit of its bargain in the transaction and any misrepresentations Johnson may have made were immaterial. We conclude that there was sufficient evidence to convict Johnson on the right-to-control theory because a reasonable jury could conclude that his misrepresentations to Cairn related to the price of the transaction and were capable of influencing Cairn's decisionmaking.

United States v. Johnson, 2018 U.S. Dist. LEXIS 71257 (E.D.N.Y., Apr. 26, 2018)

Disposition: AFFIRMED.

CORE TERMS

misrepresentations, Fixing, wire fraud, pounds, bargain, convict, exchange rate, ramp, currency, buy, fix rates, influencing, trading, right-to-control, pips, reasonable jury, misappropriation, depriving, quotation, marks, sufficient evidence, essential element, fraudulent intent, decisionmaking, colleague, defraud, dollars, execute, hourly, notice

Criminal Law & Procedure, Standards of Review, Substantial Evidence, Sufficiency of Evidence, Fraud, Wire Fraud, Elements, Constitutional Law, Fundamental Rights, Procedural Due Process, Scope of Protection