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Guilty Plea In FOREX Price Fixing Case

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; 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.

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 Indictment

NOTE: 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:

(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.

For the full sense of BrokeAndBroker.com Blog's publisher Bill Singer's less than enthusiastic reaction to DOJ's ongoing FOREX cases:

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: 
(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 each other; 
(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; and 
(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. 

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).

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