Mark Johnson is out of prison, at least for the time being.  It’s a small, significant step in the right direction. But it’s just a step.

There is more work to be done.


Last evening in New York, the Court of Appeals for the Second Circuit – the appeals court for New York, Connecticut and Vermont – granted Mark Johnson bail pending appeal. 

Johnson, the FX trader who was sentenced to two years in jail for wire fraud earlier this year, is now at liberty to pursue his quest to overthrow the original verdict from outside, rather than inside, prison.

If you are not familiar with legal proceedings (as I certainly was not before I got involved in this case) this might puzzle you.  What does it mean?

For someone convicted of a crime to be able to get bail pending appeal, his lawyers must demonstrate two things:  first, that there are substantial legal questions that need to be resolved; second, that, in the meantime, the released man won’t do a runner – he’s not a ‘flight risk’, in the lingo.

I’ve written about the legal issues before.  In short, Johnson’s lawyers are questioning the entire basis of the prosecution’s case.  Questioning the theory (dragged unceremoniously from its home in equities insider trading) that Johnson ‘misappropriated’ information.  Questioning the idea that Johnson’s client Cairn Energy didn’t get what it bargained for.

Above all, questioning whether an offense that appears to have been constructed by the prosecution out of whole cloth and after the fact is a violation of the fundamental principle of Due Process.

The appellant (Johnson) doesn’t need to prove that he will win on these arguments, rather that the arguments aren’t frivolous and that he potentially could win.  Given that the judge at the original trial stated that the issues were ‘knotty’ and admitted that the defence could very well prevail at appeal, it was clearly difficult for the government to deny this leg of Johnson’s argument for bail.

Then there’s flight risk.  Possibly unsurprisingly in the light of the judge’s ‘knotty’ comment (and barring some technical to and fro about fiduciary duty), flight risk was the main focus of the bail hearing.

Johnson’s a Brit, said the government.  He doesn’t live here.  He has no ties to the US.  He has substantial means.  He knows he has to face two years in jail.  He is clearly someone who could easily abscond.

Nonsense, said Johnson’s lawyers (not in those words, obviously, but the subtext was clear through the lawyerly language).  He has pledged his family home as surety.  He was allowed back to the UK four times before the trial and before sentencing; on each occasion he came back to the US.  On the last occasion, on the eve on sentencing, he flew back to the USA knowing that he could potentially get a sentence of 7 to 9 years and in agony from a recent debilitating knee injury.

He’s going to flee now?  Now he knows that, with good behaviour, he’ll be out of jail in 20 months, of which he’s served almost two already?  And how? Is he going to hop to Argentina? (Ok.  I made that last bit up, but it certainly occurred to me).

Happy to say, the appeals judges sided with Johnson.  He’ll soon be out and working with his lawyers on the actual appeal.

When will that be?  That’s unknown at this point.  These things, like all legal procedures, are glacially slow.  But there is a lot of work to be done in the meantime since this case raises huge legal questions of fundamental importance to the financial services industry.

And how can you help?  Well if you are reading this and are in any position to influence the provision of industry-led ’amicus briefs’ (statements expressing concern about legal issues involved in an appeal) then you can raise your voice.

Or you can look the other way, mumble apologetically about ‘risk assessment’, and hope for the best.

Your choice.



Kevin Rodgers’ book ‘Why Aren’t They Shouting?’ is available at Amazon