Former JPMorgan, RBS, Barclays affiliate traders indicted in forex conspiracy
They were indicted 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.
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.
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. ■