Court allows US Govt to use bank guilty pleas during trial of “FX Cartel”

Maria Nikolova

The guilty pleas of Barclays PLC, Citicorp, J.P. Morgan Chase & Co., The Royal Bank of Scotland plc, and UBS AG may be used during trial of ex-Forex traders, Judge Richard M. Berman says.

Further to a request by the Department of Justice (DOJ) to be able to refer to the guilty pleas of some of the world’s top banks during trial of former FX traders known as the FX Cartel or FX Mafia, Judge Richard M. Berman of the New York Southern District Court has earlier today sided with the US Government.

In a Decision & Order, seen by FinanceFeeds, Judge Berman denied the defendants’ motion seeking to prohibit any references to Bank Pleas at trial because of “the extreme risk the jury would improperly rely on the Bank Pleas instead of the evidence introduced at trial”.

In May 2015, Barclays PLC, Citicorp, J.P. Morgan Chase & Co., The Royal Bank of Scotland plc, and UBS AG entered into separate plea agreements with the United States Department of Justice. The banks plead guilty to violating Section One of the Sherman Antitrust Act, 15 U.S.C. § 1, by “entering into and engaging in a conspiracy to fix, stabilize, maintain, increase or decrease the price of, and rig bids and offers or, the EUR/USD currency pair exchanged in the FX Spot Market by agreeing to eliminate competition in the purchase and sale of the EUR/USD currency pair in the United States and elsewhere.”

The Bank Pleas state, among other things, that the Banks “through their traders, participated in the conspiracy from at least as early as December 2007 and continuing until at least January 2013.” The Defendants in this case, that is, Richard Usher, Rohan Ramchandani, and Christopher Ashton, at all relevant times, were traders of JPMorgan Chase & Co., The Royal Bank of Scotland plc, Citicorp, and/or Barclays PLC. Richard Usher was employed by The Royal Bank of Scotland plc until in or about 2010, and then by JPMorgan Chase & Co. until in or about October 2013. Rohan Ramchandani was employed by Citicorp from in or about 2011 through in or about January 2014. Christopher Ashton was employed by Barclays PLC from in or about September 2006 through in or about May 2015.

The former traders are charged under Section I of the Sherman Act with virtually the same conduct set forth in the Bank Pleas, namely, “participating in a combination and conspiracy to suppress and eliminate competition for the purchase and sale of EUR/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 PX Spot Market.”

The heart of the traders’ trial defense appears to be that their participation in the alleged conspiracy to price fix the EUR/U.S. Dollar currency pair was well within the customs, norms, or expected behaviors of the foreign exchange market and benefitted the operation of the FX market as well as its individual participants. The Government had requested to enter the Bank Pleas into evidence to rebut these defenses.

The Court finds that the Government may introduce into evidence the Bank Pleas to rebut these defense theories.

To limit even the possibility of any prejudice to the defendants stemming from introduction of the Bank Pleas, the Court intends to give a limiting instruction that Defendants in this case are presumed to be innocent and that Bank Plea evidence is not proof that Defendants committed the crime(s) charged in the Indictment.

The case is captioned USA v. Usher et al (1:17-cr-00019).

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