US Halts Scott Extradition Efforts
Posted by Colin Lambert. Last updated: August 9, 2023
With The Full FX View
The US Department of Justice (DoJ) has filed a Motion to Dismiss Indictment to end its efforts at extraditing former HSBC FX trader Stuart Scott over allegations of wire fraud relating to the Cairn Energy FX hedge that saw colleague Mark Johnson convicted and jailed.
The DoJ applied for Scott’s extradition from the UK in 2017, but the application was refused in the UK High Court in mid-2018 and the prosecution team in the US has now advised the court that efforts to obtain extradition were unsuccessful and that further efforts are “futile”.
The Full FX View
This ends what has no doubt been a stressful time for Stuart Scott, but raises serious questions over the conviction of Mark Johnson, Scott’s former boss, who served 18 months in a US jail after being convicted of charges under the same arraignment.
In a footnote to the Scott Motion to Dismiss, the DoJ acknowledges a recent decision by the US Supreme Court that invalidated one of the two theories the DoJ was relying upon to convict Scott, namely the “right to control” theory. Right to control was a central plank of the US government’s ever-changing argument against Johnson, namely that HSBC’s actions removed this right from Cairn Energy.
This was a specious argument in many eyes at the time, in a post, US law firm White & Case, stated, “…Johnson’s wire fraud conviction under the right-to-control theory highlights some concerning trends in the government’s recent financial crimes prosecutions.”
It added, “…where the government seeks to convict for a financial crime, the government should have the burden of proving that economic harm was objectively possible – not just that some people would like to think that it was. The Johnson case is a sobering reminder that the government, and the courts, may not agree that the government bears that burden.”
With Right to Control now out of bounds for fraud convictions, surely the Johnson case has to be revisited? It will not give him back the years (and money) spent fighting these charges, and especially his time in jail, but surely – as has increasingly happened with the Libor convictions – Mark Johnson deserves the right to get his good name back by having what was in many minds a wrongful conviction, rescinded?
Only then, can we say that this whole sorry saga is finally at and end.
“The United States has exhausted extradition avenues and Mr. Scott shows no sign of leaving the UK while charges against him are pending,” a court filing states. “We submit that the vanishingly small probability of securing Mr. Scott’s appearance is insufficient to justify keeping this matter on the Court’s docket.”
Under US law, once the Motion to Dismiss is approved, Scott can no longer be tried on the same charges, the court filing also notes that the conduct at issue is outside the statute of limitations for wire fraud.
