January 13, 2017
This is an update of "FOREX Markets Hit By New Indictments" (BrokeAndBroker.com Blog,
On May 20, 2015, the Department of Justice / Antitrust Division obtained guilty pleas and some $2.5 billion in criminal fines for conspiring to fix prices and rig bids in the foreign currency exchange spot market settlements from Barclays PLC, Citicorp, JPMorgan Chase & Co., and The Royal Bank of Scotland plc. See: "Five Major Banks Agree to Parent-Level Guilty Pleas / Citicorp, JPMorgan Chase & Co., Barclays PLC, The Royal Bank of Scotland plc Agree to Plead Guilty In Connection With The Foreign Exchange Market and Agree to Pay More Than $2.5 Billion In Criminal Fines" (Press Release, United States Department of Justice / Antitrust Division, 15-643, May 20, 2015).READ FULL TEXT PLEA AGREEMENTS:The other shoe has dropped.
The Feds are back on the scent with United States of America v. Richard Usher, Rohan Ramchandani, and Christopher Ashton, Defendants (Indictment, United States District Court for the Southern District of New York, 17-CR-19 /January 10, 2017), which charges three Defendants employed by some of the settling institutions with Conspiracy to Restrain Tradein connection with their alleged roles in manipulating hundreds of billions of dollars in the foreign currency exchange spot market for U.S. dollars and euros.
Richard Usher: former Head of G11 FX Trading-UK, an affiliate of The Royal Bank of Scotland plc; and 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; andChristopher 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.If convicted, each defendant faces a maximum penalty of 10 years in prison and a $1 million fine (or twice the gain derived or loss suffered from the crime if said amounts exceed $1 million)READ FULL-TEXT IndictmentNOTE: An Indictment contains merely allegations and defendants are presumed innocent unless and until found guilty beyond a reasonable doubt in a court of law.As alleged in the Indictment:
18. From at least as early as December 2007 and continuing at least through January 2013 (the "relevant period"), the exact dates being unknown to the Grand Jury, in the Southern District of New York and elsewhere, RICHARD USHER, ROHAN RAMCHANDANI, and CHRISTOPHER ASHTON (collectively, "Defendants"), and their co-conspirators, participated in a combination and conspiracy to suppress and eliminate competition for the purchase and sale of BUR/USD in the United States and elsewhere by fixing, stabilizing, maintaining, increasing, and decreasing the price of, and rigging bids and offers for, EUR/USD in the FX Spot Market. The combination and conspiracy engaged in by Defendants and their co-conspirators unreasonably restrained interstate and U.S. import trade and commerce in violation of Section 1 of the Sherman Act (15 U.S.C. § 1),As further detailed in the Indictment:
23. For the purpose of forming and carrying out the charged combination and conspiracy, USHER, RAMCHANDANI and ASHTON, the Defendants, together with their coconspirators, did those things that they combined and conspired to do, including, among other things:
For the full sense of BrokeAndBroker.com Blog's publisher Bill Singer's less than enthusiastic reaction to DOJ's ongoing FOREX cases:
(a) participating in telephone calls and electronic messages, including engaging in near-daily conversations in a private electronic chat room, which the chat room participants, as well as others in the FX Spot Market, at times referred to as "The Cartel" or "The Mafia," and discussing, among other things, past, current, and future customer orders and trades; customer names; and risk positions;
(b) agreeing to suppress and eliminate competition in the FX Spot Market, including, at times, by refraining from trading against each other's interests and coordinating their bidding, offering, and trading as described in Paragraphs 23(c) and (d) below;
(c) coordinating their bidding, offering, and trading in certain instances, for the purpose of increasing, decreasing, maintaining, and stabilizing the price of EUR/USD, including by refraining from bidding, offering, and trading at certain times;
(d) coordinating their bidding, offering, and trading, including by refraining from bidding, offering, and trading, in and around the time Of certain ECB and WMR fixes, for the purpose of increasing, decreasing, maintaining, and stabilizing the price of EUR/USD by the time of the fix, profiting from trading in and around the time of the fix, and avoiding or lessening any loss from trading in and around the time of the fix;
(e) filling customer orders at prices determined by such fix rates; and (f) monitoring and enforcing the combination and conspiracy, set forth in Paragraph 18.
- The Goose And Gander Of Forex Fraud Hypocrisy(BrokeAndBroker.com Blog, July 2, 2015)
- SEC Commissioner Stein Stands Alone In Her Defense Of The Investing Public And Industry
- (BrokeAndBroker.com Blog, May 22, 2015)
- JPMorgan Chase, Citigroup, Barclays, RBS, And UBS Seek SEC Reg D Waivers (BrokeAndBroker.com Blog, May 21, 2015)
- UPDATE: Bill Singer's Ennui In Response To The DOJ FOREX Press Junket (BrokeAndBroker.com Blog, May 20, 2015)
UPDATE: January 13, 2017
On January 12, 2017, Central and Eastern European, Middle Eastern, and African Emerging Markets ("CEEMEA") currency dealer Christopher Cummins pleaded guilty to a one-count Information filed in the United States District Court for the Southern District of New York ("SDNY").United States of America v. Christopher Cummins (Information, SDNY, 17 CR 026 / January 6, 2017). As set forth in the Information:
13. From at least as early as January 2007 and continuing until at least July
2013, the exact dates being unknown to the United States, in the Southern District of
New York and elsewhere, Defendant and his co-conspirators, and others known and
unknown, knowingly entered into and engaged in a combination and conspiracy to
suppress and eliminate competition by fixing prices for CEEMEA currencies traded in
the United States and elsewhere. The combination and conspiracy engaged in by the
Defendant and his co-conspirators was in unreasonable restraint of interstate and U.S.
import trade and commerce in violation of Section 1 of the Sherman Act (15 U.S.C. § 1).
14. The charged combination and conspiracy consisted of a continuing
agreement, understanding, and concert of action among Defendant and his co-conspirators, and others known and unknown, the substantial terms of which were to fix
prices for CEEMEA currencies traded in the United States and elsewhere.
15. For the purposes of forming and carrying out the charged combination and
conspiracy, Defendant and his co-conspirators, and others known and unknown, did those
things which they combined and conspired to do, including, among other things:
Cummins faces a maximum penalty for violating the Sherman Act of 10 years in prison and a $1 million fine (or twice the gain derived or loss suffered from the crime if said amounts exceed $1 million).
(a) agreeing to enter into non-bona fide trades among themselves on an
electronic FX trading platform, for the sole purpose of manipulating prices;
(b) agreeing to subsequently cancel these non-bona fide trades, or to
offset them by entering into equivalent trades in the opposite direction, in a
manner designed to hide such actions from other FX market participants;
(c) coordinating on the price, size, and timing of their bids and offers on
an electronic FX trading platform in order to manipulate prices on that and other
electronic FX trading platforms;
(d) agreeing to refrain from trading where one or more of the co-conspirators
had a stronger need to buy or sell thanthe others, in order to prevent
the co-conspirators from bidding up the price or offering down the price against
(e) coordinating their trading prior to and during fixes in a manner
intended to manipulate final fix prices;
(f) coordinating their trading in order to move pricing through their
customers' limit order levels;
(g) agreeing on pricing to quote to specific customers;
(h) engaging in the above-described behavior by communicating
through private chat rooms, phone calls, text messages, other personal cell phone
applications, and in-person meetings within the Southern District of New York;
(i) employing measures to hide their coordinated conduct from
customers as well as other FX market participants, including by using code names
for specific customers, communicating by personal cell phone applications instead
of on recorded business phone lines, and concealing the existence of trades entered
into solely to manipulate prices, among other steps.