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10Jan17

Three Former Traders for Major Banks Indicted in Foreign Currency Exchange Antitrust Conspiracy

A federal grand jury returned an indictment against three former traders of major banks for their alleged roles in a conspiracy to manipulate the price of U.S. dollars and euros exchanged in the foreign currency exchange (FX) spot market, the Justice Department announced today.

The one-count indictment, filed in the U.S. District Court for the Southern District of New York, charges Richard Usher (former Head of G11 FX Trading-UK at an affiliate of The Royal Bank of Scotland plc, as well as former Managing Director at an affiliate of JPMorgan Chase & Co.), Rohan Ramchandani (former Managing Director and head of G10 FX spot trading at an affiliate of Citicorp) and Christopher Ashton (former Head of Spot FX at an affiliate of Barclays PLC) with conspiring to fix prices and rig bids for U.S. dollars and euros exchanged in the FX spot market.

"Whether a crime is committed on the street corner or in the corner office, no one gets a free pass simply because they were working for a corporation when they broke the law," said Deputy Attorney General Sally Q. Yates. "Today's indictment reiterates our commitment to holding individuals accountable for corporate misconduct."

"The charged conspiracy involved competitors manipulating the exchange rate for the hundreds of billions of dollars traded on foreign exchange markets for their benefit and to the detriment of their customers," said Principal Deputy Associate Attorney General Bill Baer. "We previously secured criminal convictions of the financial institutions involved in the misconduct. Today we seek to hold accountable the individuals who conspired on their behalf."

"These former bank traders are alleged to have gained an unfair advantage on their counterparts by committing corporate fraud involving the manipulation of the foreign currency exchange," said Assistant Director in Charge Paul M. Abbate of the FBI's Washington Field Office. "Their actions affected worldwide trading positions in the global marketplace. Today's announcement reinforces the FBI's commitment to investigate and prosecute individuals responsible for criminally interfering with the global financial markets."

The indictment follows the May 20, 2015 agreements of Barclays PLC, Citicorp, JPMorgan Chase & Co., and The Royal Bank of Scotland plc to plead guilty to conspiring to fix prices and rig bids for U.S. dollars and euros exchanged in the FX spot market, and to pay criminal fines totaling more than $2.5 billion. On Jan. 5, 2017, the federal district court in Connecticut accepted those plea agreements and sentenced the banks accordingly.

The charge in the indictment carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $1 million.

According to the indictment, from at least December 2007 through at least January 2013, Usher, Ramchandani and Ashton (along with unnamed co-conspirators) conspired to fix prices and rig bids for the euro - U.S. dollar currency pair. Called "the Cartel" or "the Mafia," this group of traders participated in telephone calls and electronic messages, including near-daily conversations in a private electronic chat room, to carry out their conspiracy. Their anticompetitive behavior included colluding around the time of certain benchmark rates known as fixes, such as coordinating their orders and trading to manipulate the price of the currency pair by the time of the fix. In another example of collusion, the conspirators coordinated their orders and trading to manipulate the price of the currency pair, such as by refraining from entering orders or trading at certain times.

The charge in the indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty.

The Department of Justice has now charged six individuals in the FX investigation. On July 20, 2016, fraud charges were brought by the Justice Department's Criminal Division against two FX executives for conspiring to defraud a client of their bank through a front running scheme. On Jan. 4, 2017, an antitrust charge and plea agreement were announced for a trader in connection with a conspiracy to manipulate emerging market FX rates.

This investigation is being conducted by the FBI's Washington Field Office. This prosecution is being handled by the Antitrust Division's New York Office. The Criminal Division's Fraud Section also provided substantial assistance in this matter.

The charge in this case was brought in connection with the President Obama's Financial Fraud Enforcement Task Force. The president established the task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys' Offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.

[Source: DOJ, Antitrust Division, Washington, 10Jan17]
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Corruption and Organized Crime
small logoThis document has been published on 11Jan17 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.