Antitrust Law Daily Foreign currency exchange probe nets another guilty plea
Thursday, January 12, 2017

Foreign currency exchange probe nets another guilty plea

By Jeffrey May, J.D.

A second foreign currency exchange (FX) dealer has pleaded guilty to federal fixing price charges. A one-count information was filed in the federal district court in New York City today, naming Christopher Cummins—a dealer of Central and Eastern European, Middle Eastern, and African (CEEMEA) currencies on the FX desk of an unnamed New York-based financial institution—as a participant in the conspiracy. The Department of Justice announced the plea agreement with Cummins just a little over a week after disclosing a plea agreement with Jason Katz, another FX trader of CEEMEA currencies. Additionally, three traders were indicted earlier this week for conspiring to fix prices and rig bids for the euro–U.S. dollar currency pair (U.S. v. Cummins, Criminal No. 17 Crim 026).

According to the latest charge, Cummins participated in the conspiracy from approximately January 2007 until July 2013. That is the same period for which Katz admitted to conspiring. The conspirators reportedly manipulated prices on an electronic FX trading platform through the creation of non-bona fide trades, coordinated the placement of bids and offers on that platform, and agreed on currency prices they would quote specific customers, among other conduct.

Like Katz, Cummins has agreed to cooperate in the government’s ongoing investigation. The maximum prison sentence for the challenged conduct is ten years; however, Cummins will likely get a reduced sentence for his cooperation.

"Collusion by FX dealers for the purpose of fixing foreign currency exchange rates is no different than collusion regarding traditional products and services that the Antitrust Division routinely prosecutes," said Brent Snyder, Deputy Assistant Attorney General in charge of criminal enforcement at the Department of Justice Antitrust Division, in announcing the plea agreement. "The exchange rate manipulation pursued by the charged CEEMEA FX dealers and their co-conspirators, like any other form of price fixing, was intended to stymie free competition that promotes market integrity and fair pricing."

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