In the US, former London traders Rohan Ramchandani, Chris Ashton, and Richard Usher have pleaded not guilty to criminal charges accusing them of conspiring to manipulate prices in the foreign exchange market. Ashton previously worked at Barclays (BARC) as the bank’s global head of spot currency trading. Ramchandani used to be Citigroup’s (C) G-10 spot currency trading head. Usher served a similar role at JPMorgan & Chase (JPM).
Prosecutors are accusing them of conspiring with other traders in a Forex rigging scheme to share sensitive client information through an electronic chat room referred to as the “Cartel,” as well as via phone, in order to quash competitors.
The criminal charges are related to a global probe into currency market rigging. To date, seven banks have paid approximately $10B fines over this type of manipulation, including Citigroup, Barclays (BARC), JPMorgan, and Royal Bank of Scotland (RBS).
BNP Paribas Settles with Federal Reserve for $246M
On Monday, The Federal Reserve fined BNP Paribas (BNP) over alleged misconduct related to forex price fixing for $246M. It accused the bank of failing to detect and stop rigging by its traders in electronic chatrooms, as well as for “unsafe and unsound practices.” The Fed said there were deficiencies in BNP’s internal controls and oversight of traders. The fine comes two months after the New York’s Department of Financial Services fined BNP $350 over the same contentions.
Meantime, Ramchandani, Ashton, and Usher, who were released on $1M, $200K, and $650K bond, respectively, are scheduled to go on trial next year. As part of their defense, all three former traders have noted the UK Serious Fraud Office’s own decision last year to close its probe into forex rigging, claiming that this is proof they did not engage in wrongdoing. The British regulator had stated that it didn’t have a “realistic prospect” of being able to get convictions in this matter.
Early this year, ex-Barclays and BNP Paribas trader Jason Katz pleaded guilty to conspiring with others to rig currency prices in order to manipulate emerging market currency trades. As a dealer of African, Middle Eastern, and Eastern and Central European currencies, Katz sought to fix prices through non-bona fide trades and other actions.
Meantime, another former trader, Ex-HSBC Holdings (HSBC) forex executive Mark Johnson pleaded not guilty to conspiracy and wire fraud charges after he and another former HSBC trader, Stuart Scott, were accused of fraudulently trading head of one client’s $3.5B currency trade in order to make the bank about $8M. Scott, who was arrested in Britain in June, maintains that he did nothing wrong. His extradition hearing regarding whether he will be sent back to the US is scheduled for later this month.
Dozens of traders have been fired over forex rigging allegations.
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‘Cartel’ Trio Pleads Not Guilty to Rigging Forex Market, Bloomberg, July 17, 2017