By Jody Coultas, J.D.
Three former traders of major banks voluntarily surrendered to the FBI and were arraigned on a charge arising from 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 has announced. On January 10, a federal grand jury in New York City indicted United Kingdom nationals Richard Usher, Rohan Ramchandani, and Christopher Ashton as part of its investigation of price fixing in the FX market. Yesterday, the defendants entered pleas of not guilty in the federal district court in New York City. A trial could be held as early as June 2018 (U.S. v. Usher, Criminal No. 17 CRIM 019).
According to the one-count indictment, from at least December 2007 through at least January 2013, Usher, Ramchandani, and Ashton 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, the government contends.
During the alleged conspiracy, Usher had served as the 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. Ramchandani was the former managing director and head of G10 FX spot trading at an affiliate of Citicorp. Ashton was head of Spot FX at an affiliate of Barclays PLC.
In addition to the indictment naming Usher, Ramchandani, and Ashton, additional defendants in the probe include Jason Katz, a dealer of Central and Eastern European, Middle Eastern, and African (CEEMEA) currencies on the New York FX desks of three successive financial institutions, and 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. On January 4, the government announced that Katz agreed to plead guilty and cooperate in the government’s ongoing investigation. The Justice Department announced the plea agreement with Cummins just a little over a week after disclosing a plea agreement with Katz. In addition, in July 2016, fraud charges were brought by the Department of Justice Criminal Division against two FX executives for conspiring to defraud a client of their bank through a front running scheme.
Four major banks–Citicorp, JPMorgan, RBS, and Barclays– pleaded guilty in 2015 at the parent level and agreed to collectively pay more than $2.5 billion in criminal fines for their participation in the conspiracy to manipulate the price of U.S. dollars and euros exchanged in the FX market. They were sentenced in the federal district court in Bridgeport, Connecticut, on January 5. A fifth bank, UBS, pleaded guilty to manipulating the London Interbank Offered Rate (LIBOR) and other benchmark interest rates and agreed to pay a $203 million criminal penalty, after breaching its December 2012 non-prosecution agreement resolving the LIBOR investigation.
Attorneys: Jeffrey Martino for Department of Justice. Andrew Tomback and Mark Gidley (White & Case LLP) for Richard Usher.
Companies: Barclays PLC; Citicorp; JPMorgan Chase & Co.; Royal Bank of Scotland PLC; UBS PLC
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